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SYDNEY: Macquarie Group sold out of most of its Australian real estate business on Friday Feb 12 for US$265 million as as part of its strategy to focus harder on traditional investment banking and broking.
But the sale to Australian property fund manager Charter Hall Group disappointed some Macquarie investors who had been hoping for a higher price, and the bank's stock fell 1.8 percent.
"The market was looking for more," said David taylor, a market analyst at CMC Markets.
Macquarie pioneered the specialist listed-funds model in the early 1990s, buying assets and placing them into funds from which it earned management fees, encouraging even some Wall Street investment banks to follow suit.
But after the global financial crisis struck, some of the bank's investment funds, including Macquarie Airports and Macquarie Communications Infrastructure Group, bought out Macquarie's management rights to save costs.
Macquarie pocketed large sums of cash from selling its management rights and deployed some of its capital offshore, picking up investment banking assets cheaply.
Under Friday's deal, Macquarie will get cash and 10 percent of Charter Hall. Its shareholding in Macquarie Office Trust will fall to 6 percent from 14 percent and in Macquarie Countrywide to 4 percent from 12 percent. Macquarie Office Trust has 39 properties and Macquarie Country Wide Trust has 225 properties, their Web sites show.
Charter Hall will emerge from the deal with more than A$10 billion in assets under management. It will raise A$220 million in new shares to help fund the deal. - Reuters
