Macquarie offers infrastructure fund to retail buyers
The MQ Infrastructure Strategies Fund rolls out to Hong Kong retail investors, with the Australian asset manager promising a similar product for Singapore.
Hong Kong retail investors will shortly get the chance to have their own diversified infrastructure portfolio of bridges, motorways, ports, electricity pylons and water assets, through the new MQ Infrastructure Strategies Fund.
This long-only, open-end, unit trust-style product is managed by MQ Portfolio Management. This team is the former proprietary desk of the Macquarie equity markets group, in something of a move from long/short to long-only. They arenÆt taking a black box approach to security selection, but they will be using quantitative processes and systematic screening.
Fees are 5% upfront with a 1.5% management fee, and a 10% performance fee over a 5% hurdle. Liquidity is available daily.
The fund is trying to aim for equity-style returns with bond-like volatility. Macquarie Global Infrastructure Index has gone up on an annualised basis by 26% on average during the last three years. The new fund will invest in stocks included in that index as well as in companies expected to be included at some point.
Putative investors might feel concerned that their money will go into speculative brownfield infrastructure projects, for example building Indian sewers; the kind of projects for which the third world would like foreign investors to pony up multi-billions at the same time as their own indigenous tycoons target cross-border M&A deals of western brands. However, the concept of this new fund is that investors will get exposure to mature infrastructure plays where predictable cash flow streams are already flowing.
The fund is a retail-approved product in Hong Kong and dividends will be rolled up into growth of the units. This product is also available to accredited investors in Singapore, and a Singapore-specific product will be launched in the future, which is expected to have a greater emphasis on dividend distribution.
HSBC is fund administrator, custodian and trustee of the portfolio.
This long-only, open-end, unit trust-style product is managed by MQ Portfolio Management. This team is the former proprietary desk of the Macquarie equity markets group, in something of a move from long/short to long-only. They arenÆt taking a black box approach to security selection, but they will be using quantitative processes and systematic screening.
Fees are 5% upfront with a 1.5% management fee, and a 10% performance fee over a 5% hurdle. Liquidity is available daily.
The fund is trying to aim for equity-style returns with bond-like volatility. Macquarie Global Infrastructure Index has gone up on an annualised basis by 26% on average during the last three years. The new fund will invest in stocks included in that index as well as in companies expected to be included at some point.
Putative investors might feel concerned that their money will go into speculative brownfield infrastructure projects, for example building Indian sewers; the kind of projects for which the third world would like foreign investors to pony up multi-billions at the same time as their own indigenous tycoons target cross-border M&A deals of western brands. However, the concept of this new fund is that investors will get exposure to mature infrastructure plays where predictable cash flow streams are already flowing.
The fund is a retail-approved product in Hong Kong and dividends will be rolled up into growth of the units. This product is also available to accredited investors in Singapore, and a Singapore-specific product will be launched in the future, which is expected to have a greater emphasis on dividend distribution.
HSBC is fund administrator, custodian and trustee of the portfolio.
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