Letter to Australian Financial Review in response to article on 7 February 2012

We are somewhat bemused by your extensive coverage of Macquarie’s market update yesterday.

Coverage included the front, back and two inside pages for a market update that moved the share price 20c or less than one percent. Perhaps this lack of market response is due to an understanding by investors of the impact of global factors on securities markets. A casual check would have confirmed the results for our Securities and Macquarie Capital businesses are consistent with global securities firms.

Producing the volume of coverage came at some cost to its quality and accuracy. With regard to factual errors, the AFR:

1. Reported that the Group admitted a series of European acquisitions in recent years were a mistake. This is incorrect and flies in the face of the obvious success of large acquisitions outlined yesterday and which include Delaware Investments and aircraft, rail, meters and car lease portfolios. These acquisitions are now part of our three successful annuity-style businesses which are expected to increase their profit contribution for 2012 by 20%. Examples of their significant achievements include profit from the Corporate and Asset Finance business increasing from $100 million to $600 million since 2008 and the US-based Delaware Investments funds management business last week being named No. 1 US Mutual Funds Manager of the Year¹.
2. Referred to Macquarie having shut down “derivative businesses…in Asia, Hong Kong, South Africa, Australia and the US.” This is incorrect. As outlined at yesterday’s briefing, Macquarie continues to have substantial derivatives businesses in all those countries focussing on arbitrage and ADR/GDR trading and warrants (No. 1 market share in Korea and Singapore and No. 3 in Hong Kong and Australia).
3. Questioned why the Group was not reviewing its global cash equities trading platform. During yesterday’s market briefing, the Group referred in detail to a review and restructure of its cash equities and ECM businesses.
4. Questioned the Group’s global securities rankings while ignoring strong regional rankings including No. 1 for execution in Asia, No. 3 for execution globally², No. 5 for Asia-Pacific research coverage³ and Lead Manager on the US top issue of 2011⁴.
5. Noted an exit from retail structured products in Australia. Macquarie continues to market retail structured products through the Macquarie Funds Group.

1. Barrons Magazine
2. Thomson Reuters
3. Thomson Reuters
4. Thomson Reuters