Thank you for requesting this Product Disclosure Statement from Funds
Focus.
Fee Reduction
As highlighted within our offers page, whilst most managed funds typically pay
an entry fee of up to 5%. Applications lodged through Wealth Focus will
receive a rebate of up to 5% directly into your fund, providing you with more
money in your fund.
How to Apply
Please have a read through the PDS and if you would like to invest the
application pages can generally be found towards the back of the document.
You will only need to send the application section back with a cheque/direct
debit payable direct to the investment company (not ourselves). You should
take note of any minimum investment amounts that may apply and proof of ID
that is now required for the new Anti-Money Laundering regulations.
Then mail the completed application directly to us.
We will then check to ensure your form is completed correctly before
forwarding your document on to the investment provider on your behalf.
Wealth Focus Pty Ltd
Reply Paid 760
Manly
NSW 1655
Please note that we are unable to track applications mailed directly to the
product provider and therefore cannot guarantee that your discounts have
been applied in these instances.
Should you wish to take advantage of our free annual valuation and tax report
for all your investments you should complete our broker nomination form for
The Wealth Focus Investment Service.
Regards
Sulieman Ravell
Managing Director
Wealth Focus Pty Ltd
ABN 87 123 556 730 AFSL: 314872
56 The Corso, Manly, NSW 2095
Postal Address: PO Box 760, Manly, NSW 1655
Requirements for verifying your identity under the new Anti Money Laundering
(AML)/Counter Terrorism Financing (CTF) Act
The new AML/CTF Act cameinto effect on the 12th December 2007. All financial
planning and fund management companies are now required to collect, verify and
store specific customer information before arranging certain services such as managed
investments for a client. It is designed to prevent, detect and protect Australian
business from money laundering and the financing of terrorist activities.
We are currently in a transition phase and as such whilst most companies will not
accept any new business without a person identity being verified, there are a number
that still do not. To avoid confusion, we request that all new applications are sent with
‘certified documentation’.
We’ve found that the easiest way to provide the required documentation is to
have a copy of your driving licence or passport certified by Australia Post or a
Justice of the Peace (please see following page for a full list of individuals that
can certify documentation).
Once this has been completed, under the current requirements we will not
require you to send identification again.
What you need to do
You will need to enclose a certified piece of photographic evidence or one piece of
primary non-photographic evidence and one piece of secondary evidence (please refer
to the Identification Form for document requirements), with your application form
and post to us at the following address
Wealth Focus Pty Ltd
Reply Paid 760
Manly
NSW 1655
Please do not send us original driving licences or passports as these can very easily
get lost in the post. Copies of documents can be certified by an authorised individual,
they will need to sight and verify that the copy is a ‘certified true copy’, sign, date,
print their name and list their qualification.
ANTI-MONEY LAUNDERING REQUIREMENT FOR NEW APPLICATIONS
IDENTIFICATION FORM
INDIVIDUALS & SOLE TRADERS
GUIDE TO COMPLETING THIS FORM (MUST BE INCLUDED WITH ALL NEW APPLICQATIONS)
o Complete one form for each applicant. Complete all applicable sections of this form in BLOCK LETTERS.
o Please contact us on 1300 55 98 69 if you have any queries.
o If you wish to apply in the name of a super fund, trust or company, please contact us for an alternative identification
form.
SECTION 1A: PERSONAL DETAILS
Date of Birth dd/mm/yyyy
Surname
Full Given Name(s)
Residential Address (PO Box is NOT acceptable)
Street
Suburb
State
Postcode
Country
COMPLETE THIS PART IF INDIVIDUAL IS A SOLE TRADER
Full Business Name (if any)
ABN (if any)
Principal Place of Business (if any) (PO Box is NOT acceptable)
Street
Suburb
State
Postcode
Country
Who can verify customer identity documents?
Please find below a list of all the Approved Individuals that can certify documents:
•
A Justice of the Peace
•
An agent of the Australian Postal Corporation who is in charge of an office supplying postal services to the public, or a
permanent employee with more than two years continuous service (who is employed in an office supplying postal services to
the public)
A notary public (for the purposes of the Statutory Declaration Regulations 1993)
•
•
A person who is enrolled on the roll of the Supreme Court of a State or Territory, or the High Court of Australia, as a legal
practitioner (however described)
A judge, magistrate, registrar or deputy registrar of a court
•
•
A chief executive officer of a Commonwealth Court
•
A police officer
•
An Australian consular or diplomatic officer (within the meaning of the Consular Fees Act 1955)
•
An officer or finance company officer with two or more continuous years of service with one or more financial institutions (for
the purposes of the Statutory Declaration Regulations 1993)
An officer with, or authorised representative of, a holder of an Australian Financial Services Licence, having two or more
•
continuous years of service with one or more licensees, and
A member of the Institute of Chartered Accountants in Australia, CPA Australia or the National Institute of Accountants with
•
more than two years continuous membership.
1/2
V 200712.04
IDENTIFICATION FORM
INDIVIDUALS & SOLE TRADERS
VERIFICATION PROCEDURE
Attach a certified copy of the ID documentation used as proof of identity. ID enclosed should verify the applicant’s full
name; and EITHER their date of birth or residential address.
o Complete Part I (or if the individual does not own a document from Part I, then complete either Part II or III.)
o Contact your licensee if the individual is unable to provide the required documents.
PART I – ACCEPTABLE PRIMARY ID DOCUMENTS
Tick
3
Select ONE valid option from this section only
Australian State / Territory driver’s licence containing a photograph of the person
Australian passport (a passport that has expired within the preceding 2 years is acceptable)
Card issued under a State or Territory for the purpose of proving a person’s age containing a photograph of the person
Foreign passport or similar travel document containing a photograph and the signature of the person*
PART II – ACCEPTABLE SECONDARY ID DOCUMENTS – should only be completed if the individual does not own a document from Part I
Tick
3
Select ONE valid option from this section
Australian birth certificate
Australian citizenship certificate
Pension card issued by Centrelink
Health card issued by Centrelink
Tick
3
AND ONE valid option from this section
A document issued by the Commonwealth or a State or Territory within the preceding 12 months that records the provision of
financial benefits to the individual and which contains the individual’s name and residential address
A document issued by the Australian Taxation Office within the preceding 12 months that records a debt payable by the
individual to the Commonwealth (or by the Commonwealth to the individual), which contains the individual’s name and
residential address. Block out the TFN before scanning, copying or storing this document.
A document issued by a local government body or utilities provider within the preceding 3 months which records the provision
of services to that address or to that person (the document must contain the individual’s name and residential address)
If under the age of 18, a notice that: was issued to the individual by a school principal within the preceding 3 months; and
contains the name and residential address; and records the period of time that the individual attended that school
PART III – ACCEPTABLE FOREIGN ID DOCUMENTS – should only be completed if the individual does not own a document from Part I
Tick
3
BOTH documents from this section must be presented
Foreign driver's licence that contains a photograph of the person in whose name it issued and the individual’s date of birth*
National ID card issued by a foreign government containing a photograph and a signature of the person in whose name the
card was issued*
*Documents that are written in a language that is not English must be accompanied by an English translation prepared by an accredited translator.
2/2
MACQUARIE PROPERTY INCOME FUND
ARSN 103 966 909
Unlisted, open-ended property securities fund
PRODUCT DISCLOSURE STATEMENT
APIR CODE MAQ0300AU
Important notice and disclaimers
This Product Disclosure Statement (PDS) is dated
19 December 2007.
Macquarie Direct Property Management Limited (ABN 56 073
623 784, Australian Financial Services Licence 226849)
(Manager, we, us, our) as the responsible entity of Macquarie
Property Income Fund (MPIF or Fund) is the issuer of this PDS.
You can obtain a copy of the PDS electronically on MPIF’s
website at www.macquarie.com.au/propertyincomefund
or you can obtain a printed copy of this PDS free of charge
by calling 1300 652 790 (local call cost) (Monday to Friday –
8.30am to 5.30pm, Sydney time).
Capital and investment returns are not guaranteed.
Investments in MPIF are not deposits with or other liabilities
of Macquarie Bank Limited (ABN 46 008 583 542), the
Manager or any Macquarie Group entity and are subject to
investment risk, including possible delays in repayment and
loss of income and principal invested. None of Macquarie
Bank Limited, the Manager, or any other Macquarie Group
entity guarantees the performance of MPIF, the repayment
of capital from MPIF or any particular rate of return.
ASIC not liable
The Australian Securities and Investments Commission (ASIC)
takes no responsibility for the contents of this PDS.
Information on offer is contained only in this PDS
No person is authorised to give any information or to make any
representation in connection with this offer which is not contained
in this PDS. Any information or representation obtained outside
of this PDS may not be relied upon as having been authorised
by us in connection with the offer.
This is not investment advice. You should seek your own
financial advice.
This offer does not take into account your investment objectives,
financial situation or particular needs. It is important that you
read the entire PDS before making any decision whether to invest
in MPIF. In particular, in considering the prospects of MPIF, it is
important that you consider the risk factors that could affect the
financial performance of MPIF. You should carefully consider
these factors in light of your particular investment needs,
objectives and financial circumstances (including financial and
taxation issues) and seek professional advice from your
accountant, stockbroker, lawyer or other professional adviser
before deciding whether to invest. Some of the risk factors
that you should consider are set out in Section 5.
You should consider diversification of your portfolio
Diversification of your investment portfolio can be used
as part of your overall portfolio risk management strategy,
for example so that you can limit your exposure to failure
or under-performance of any one investment or manager
or asset class.
Theoretical calculations
Theoretical calculations in this PDS should not be taken
as an indicator of future performance.
Fees
The Manager, as responsible entity of the Fund, is entitled
to fees for so acting. Macquarie Bank Limited, the Manager
and their associates together with their officers and directors
may hold units from time to time. For a description of fees,
refer to Section 6.
Selling restrictions apply
This PDS does not constitute an offer in any jurisdiction
in which, or to any person to whom, it would not be lawful
to make such an offer. No action has been taken to register
or qualify the units or otherwise to permit an offering of the units
in any jurisdiction outside Australia. The distribution of this PDS
in jurisdictions outside Australia is limited and may be restricted
by law. Persons who come into possession of this PDS who
are not in Australia should seek advice on and observe any
such restrictions.
The Applicant must be an Australian citizen or resident, must
be physically in Australia at the time of making an Application and
must not be acting for the account or benefit of any US person.
The Applicant must not offer or sell any units in the US to or
for the benefit of any US person.
Updated information
Information relating to the identity of MPIF’s current
Property Securities Fund managers is incorporated into
this PDS. This information is on the MPIF website at
www.macquarie.com.au/propertyincomefund, in the document
located there and identified as ‘Underlying Fund Managers’.
A paper copy of this information is available free on request.
Information relating to the offer that is not materially adverse
may change from time to time. This information may
be updated and made available on MPIF’s website at
www.macquarie.com.au/propertyincomefund. A paper copy
of any updated information is available free on request.
Privacy
The Manager has adopted the Macquarie Group privacy policy.
You can obtain a copy of that policy by visiting the Macquarie
Group website at www.macquarie.com.au/au/privacy_policy.htm.
For an explanation of the privacy aspects of the offer, refer
to Section 7.
Financial amounts
All financial amounts contained in this PDS are expressed
in Australian currency unless otherwise stated.
Definitions
A number of capitalised words and terms have defined meanings
that appear in the Glossary.
Further information
Questions relating to the offer can be directed to the
information line on 1300 652 790 from within Australia (local
call cost) or +61 2 8232 3333 from outside Australia, or you
can contact your accountant, stockbroker, lawyer or other
professional adviser.
Macquarie Property Income Fund is an unlisted,
open-ended property securities fund. It aims to provide
Investors with high levels of after tax income and
moderate levels of capital growth by investing
in a range of Property Securities.
To date1, the listed properties securities sector has
provided attractive returns relative to the broader share
market. MPIF seeks to amplify Investors’ returns through
internal gearing. By investing in MPIF, Investors will not
need to arrange individual finance or risk a personal margin
call. For details of the risks associated with MPIF, including
gearing risk, see Section 5.
MPIF’s multi-manager investment approach seeks
to diversify manager risk and applies the skills of leading
Property Securities Fund managers.
MPIF also provides daily unit pricing, with distributions
payable quarterly, and is an eligible investment for
complying and self-managed superannuation funds.
1
From inception of the S&P/ASX 200 Property Accumulation Index in December 1979 to the date of this PDS.
Past performance is not indicative of future performance.
Macquarie Property Income Fund | Product Disclosure Statement
1
Contents
Section
1
Page
Fund snapshot
3
Overview of the Fund
2
Key features of Macquarie Property Income Fund
5
Outlines the key features and benefits of investing in the Fund
3
How we manage the Fund
6
Outlines the Fund’s investment objectives and the strategy
by which we aim to grow the Fund and your investment returns
4
Gearing
7
How we borrow to amplify your return potential
5
Risks
9
Outlines the general risks associated with an investment in the Fund
6
Fees and other costs
11
A description of the fees and charges related to the Fund,
including any fees payable to your financial adviser (as applicable)
7
Other information you need to know
16
Includes legal, regulatory and tax related information
8
Investing in the Fund
20
All the information you need to know to invest, make additional contributions,
withdraw from the Fund and monitor your investment
9
Glossary
23
Definitions for the terms used in this PDS which you may not be familiar with
10
Application Forms
The documents you need to submit if you choose to invest in the Fund
2
24
1 Fund snapshot
Below is key information about investing in Macquarie Property Income Fund with the relevant sections of this PDS where
further details can be found.
Section
Fund name
Macquarie Property Income Fund (MPIF or Fund).
–
Fund commencement
date
5 June 2003
–
APIR Code
MAQ0300AU
–
About the Fund
MPIF is an unlisted, open-ended unit trust that combines Investors’ equity with
borrowings to invest in Property Securities.
2
Manager
MPIF is managed by Macquarie Direct Property Management Limited (MDPML),
a subsidiary of Macquarie Group Limited and part of the Macquarie Real Estate Group.
MDPML has over 9 years of specialist experience in managing unlisted property funds.
Investment objective
The Fund’s primary objective is to deliver high levels of after tax income.
2.8
3
Its secondary objective is to deliver moderate levels of capital growth over time.
MPIF aims to out-perform the S&P/ASX 200 Property Accumulation Index
over the medium term.
Investment timeframe
An investment in Property Securities is generally a medium to long-term investment
(usually more than five years).
–
Risks
Key risks of an investment in MPIF include Property Securities risk, property risk
and gearing risk. For more details of risks, see Section 5.
5
Portfolio
MPIF invests in Property Securities Funds using a multi-manager strategy.
3
MPIF initially invested in Macquarie Property Securities Fund and then added Credit Suisse
Property Fund during August 2005.
The Fund may change its investments or allocations based on reviews of underlying fund manager
performance. Any change will be subject to approval by MPIF’s Investment Committee. In selecting
new investments, the Fund will follow the investment guidelines set out in Section 3.
Information about MPIF’s current investments and allocations are available on MPIF’s website.
Ways to invest
Target gearing levels
8
MPIF is available for:
n
direct investment by investors;
n
investment by complying and self-managed superannuation funds; and
n
those investors who prefer to invest through master trusts and wrap accounts
(i.e. through an IDPS Operator).
4
0% to 50% of the Fund’s gross assets.
Under the Gearing Policy, as borrowing interest rates rise and as the distribution yields of the
underlying investments fall, target gearing levels will decrease.
Investments and
withdrawals
–
Direct Investors:
Minimum initial investment
$10,000
Minimum additional investment
$5,000
Minimum withdrawal
$5,000
Minimum balance1
$5,000
IDPS Investors:
Minimum investment2 – we suggest you contact your IDPS Operator for minimum
transaction and balance requirements.
Investors can withdraw all or part of their investment in MPIF at any time
(subject to conditions, see Section 8).
Withdrawal applications received before 12 noon Sydney time on any business day are processed
on the same day with monies usually available within three business days of processing. These
periods may be extended, subject to MPIF’s constitution, in circumstances outside the Manager’s
control or at quarter end when unit pricing is on hold while distributions are being calculated.
1
The Manager reserves the right to close an account below this balance.
2
The Manager has the discretion to waive any minimum investment amounts that would otherwise apply to a direct investor in MPIF
if the investment is made through an IDPS Operator.
Macquarie Property Income Fund | Product Disclosure Statement
3
Fund snapshot | continued
Section
Fees and costs
6
Transaction Costs
1
Buy spread
Currently 0.60%
(range 0.30% to 0.60%)
Payable to the Fund
Sell spread1
Currently 0.60%
(range 0.30% to 0.60%)
Payable to the Fund
– Base Component2
0.885% p.a.
of gross assets
Payable to the Manager
– Incentive Component
–
12% of out-performance
over the Benchmark Hurdle
capped at 0.90% p.a. of
daily gross assets
Payable to the Manager
Management fee
The Benchmark Hurdle
is the S&P/ASX 200 Property
Accumulation Index plus 2%
Expenses
–
capped at
0.20% p.a.
of gross assets
Payable to the Manager
Unit pricing and
valuations
The Unit Price is calculated daily. It is calculated as the net asset value of MPIF’s investments
divided by the number of units on issue. This is adjusted for Transaction Costs (depending
on whether it is the Buy Unit Price or the Sell Unit Price).
7
Distributions
Distributions (if any) are payable quarterly at the end of March, June, September and December,
usually within two weeks after quarter end.
7
Historically, MPIF has paid a larger distribution in the June quarter, as that distribution contains
the distribution of any realised capital gains for that financial year.
Investors can nominate on the Application Form whether distributions are to be reinvested
into MPIF units or paid to the Investor. Where no nomination is made, the distributions
will be automatically reinvested into MPIF units.
Any reinvestment into MPIF units is subject to the buy spread.
Reporting
IDPS Investors will receive regular reporting via their IDPS Operator.
7
For direct Investors, the Manager will confirm every transaction made, report regularly
on the performance of MPIF, send a tax statement after the end of each financial year,
and where Investors elect, send a copy of the annual financial statement of MPIF.
How investors can
borrow to invest
in MPIF
There are a number of strategies investors can employ to invest in MPIF, including borrowing
to invest in order to reduce an investor’s capital outlay. The Macquarie Group offers loans
for these purposes; see www.macquarie.com.au/propertyaccess for more information.
7
MPIF is also available through a number of margin lending providers.
Contact details
Internet
www.macquarie.com.au/propertyincomefund
Phone
Fund enquiries 1300 652 790
Monday to Friday 8.30am to 5.30pm Sydney time
Registry enquiries 1300 137 895
Email
4
macquariedirectproperty@macquarie.com
1
Transaction Costs are applied on each application and withdrawal.
2
Equivalent to a base component of 1.77% p.a. of net assets inclusive of net GST at the maximum target gearing level of 50%.
Inside
back
cover
2 Key features of Macquarie Property Income Fund
2.1
Opportunity for high levels
of after tax income
2.5
As the Fund is open ended, you can invest or add
to your investment at any time. The Fund offers daily
liquidity, so under normal circumstances you are
able to withdraw part or all of your capital at any
time. For further information, see Section 8.
MPIF’s investment objective is to deliver high levels
of after tax income and moderate levels of capital
growth over time.
After tax income is derived from a combination of:
■
distributions from investments including
any tax deferred income or capital gains
from those investments; and
■
interest expense from the Fund’s gearing
reducing the taxable income of the Fund.
Investors can elect on the Application Form to reinvest
or receive their distributions. If no election is made,
distributions will be automatically reinvested.
2.6
Past performance
Super and wrap friendly
Complying and self-managed superannuation funds
can invest in MPIF, subject to it being consistent
with their investment strategy, because all
borrowings are undertaken at the Fund level. The
Fund is also available through a number of master
trusts and wrap accounts, giving investors the
choice to invest directly or via an IDPS Operator.
MPIF seeks to amplify returns by gearing its exposure
to Property Securities. By combining Investors’
equity with borrowings, MPIF offers Investors a larger
exposure to the Property Securities market than
would otherwise be possible.
2.2
Flexibility makes investing easier
2.7
Up to date MPIF performance figures,
including monthly fund reports and quarterly
fund updates, are available from our website:
www.macquarie.com.au/propertyincomefund
or by writing to us. Past performance is not
indicative of future performance.
Access to information
Investors can keep abreast of the Fund’s
performance through published daily unit pricing,
monthly performance reporting and quarterly fund
updates. Investors can also contact us with
questions via phone, fax or email.
For further information, see Section 8.
2.3
Potential for high after tax income
MPIF’s net income (if any) is distributed on a
quarterly basis and any net realised capital gains
are paid in the June quarter distribution.
The Fund’s objective to deliver high levels of after
tax income is supported by:
■
a multi-manager approach – investing in more
than one Property Securities Fund reduces the
reliance on the performance of any one manager;
■
portfolio diversification – the Fund invests in a wide
range of underlying Property Securities, reducing
MPIF’s reliance on the performance of any one
listed trust, geographical location, industry
sector, building or tenant; and
■
2.4
quality of underlying assets and covenants –
listed Property Securities funds typically invest
in high grade assets that are leased to quality
corporate and government tenants on long
leases, underpinning stable rental returns.
Some leases feature structured rental increases
(e.g. in line with CPI).
Gearing
MPIF provides Investors with a geared exposure
to the Property Securities sector without the burden
of arranging loan finance or the risk of a personal
margin call. Investors also need not spend their time
researching the market and selecting individual stocks.
Instead, experienced Property Securities fund managers
do this on the Fund’s behalf. Investors should note that
gearing will amplify the gains and losses of MPIF.
2.8
Experienced management underpins strong
investment performance
As Manager, MDPML is responsible for selecting
and reviewing the underlying fund managers and
managing the gearing strategy. We have over
9 years experience in unlisted property funds
management, and currently manage other property
funds including Macquarie Direct Property Fund. The
value of gross assets under MDPML’s management
was over $1,400 million as at 30 September 2007.
MDPML is part of Macquarie Real Estate Group, a division
within the Macquarie Group. The Macquarie Group
is a leading Australian financial services group that
manages approximately $224 billion in superannuation,
institutional and personal investments across a broad
range of assets including real estate, infrastructure,
Australian and international equities, the money market,
mortgages and fixed interest securities. Macquarie
currently employs over 11,000 staff worldwide.
Underlying fund manager performance is reviewed
regularly by MPIF’s Investment Committee to ensure
the underlying fund managers are delivering on their
investment objectives. The Fund may change its
investments, allocation or underlying fund managers
based on this review. Any investment change will
be subject to MPIF Investment Committee approval.
In selecting new investments, the Fund will follow
the investment guidelines set out in Section 3.3.
Macquarie Property Income Fund | Product Disclosure Statement
5
3 How we manage the Fund
3.1
Our objective
MPIF aims to provide investors with high
levels of after tax income and moderate levels
of capital growth by borrowing to invest in
Property Securities.
3.3
Investment guidelines
MPIF may invest in a number of investments at any
one time to maximise total return potential. The list
of permitted investments is:
MPIF also aims to out-perform the S&P/ASX 200
Property Accumulation Index over the medium term.
There is no guarantee that these aims will be achieved.
Investments
MPIF offers daily liquidity to Investors (under
normal circumstances).
3.2
Securities in property securities
funds and exchange traded
property funds
0-100%
Securities in Australian listed property
trusts and securities in Australian
listed property companies
0-100%
Securities in global listed property
trusts and shares in global listed
property companies
0-20%
Securities in other listed entities
with similar investment characteristics
to listed property securities
0-10%
Cash and fixed interest
0-10%
Our strategy
We use a combination of strategies to achieve the
Fund’s objectives:
■
Multi-manager investment approach
We adopt a multi-manager investment approach
to reduce the reliance on the performance of any
one manager to perform, therefore diversifying
manager risk. Property Securities fund managers
are selected for their active management
strategy, and target Property Securities with
an income focus.
MPIF initially invested in Macquarie Property
Securities Fund and added Credit Suisse
Property Fund as a second investment from
4 August 2005. Information regarding the identity
of MPIF’s current Property Securities Fund
managers (as updated from time to time)
is available on the MPIF website at
www.macquarie.com.au/propertyincomefund,
in the document located there and identified
as ‘Underlying Fund Managers’. A paper copy
of this information is available free on request.
The Manager will also report the actual allocation
invested in its monthly report.
We regularly review the underlying fund
managers’ performance to ensure their
objectives remain consistent with MPIF’s goals;
■
Gearing to amplify returns
MPIF’s gearing level is targeted between 0%
and 50% of the Fund’s gross assets. Borrowing
to invest enables the Fund to increase its total
return potential and deliver a higher tax deferred
income component than would be available
through similar, ungeared investments. All
borrowings are undertaken at the Fund level.
More information on the Fund’s gearing policy
is found in Section 4. Gearing magnifies both
the gains and losses of the Fund; and
■
Liquidity focus
MPIF invests only in readily realisable assets
to maximise liquidity. We select the investments
with the requirement that daily liquidity can
be offered continually. For further information,
see Section 8.
6
Target
allocation
range
The Fund currently holds a portfolio of investments
in Property Securities Funds. Information on these
funds is available in MPIF’s monthly fund reports
and quarterly fund updates, which are available
on our website at:
www.macquarie.com.au/propertyincomefund.
■
Use of derivatives
The Manager does not anticipate the use
of derivatives other than for hedging interest
rate risks.
Where MPIF invests into Property Securities
Funds, the underlying fund manager may use
derivatives such as futures and options:
–
as a hedge;
–
as an alternative to buying and selling
the physical security; or
–
to take advantage of opportunities
for profit.
4 Gearing
4.1
4.2
How gearing works in MPIF
MPIF combines capital contributed by Investors with
borrowings to invest in Property Securities. This
provides Investors with exposure to a much larger
investment portfolio than would otherwise be
possible, potentially increasing distribution income
and capital gains.
Gearing amplifies both investment gains and
losses, as outlined in the example below.
As a result, it can produce volatile returns.
Because gearing is a significant part of MPIF’s
strategy, the Fund is a higher risk investment
than the underlying Property Securities investments.
For more information on the risks associated
with gearing, see Section 5.
Gearing Policy
We aim to maintain a prudent Gearing Policy that
amplifies returns while mitigating risks by:
■
managing the Fund’s target gearing level at
between 0% and 50% of gross assets with
a 5% tolerance. The maximum target of 50%
applies regardless of the Fund’s income level.
Target gearing levels may be reduced from time
to time based upon prevailing market conditions;
■
not undertaking additional borrowings when
the Fund’s total borrowings exceed 50%.
Due to price changes in the Property Securities
market, interest rate market movements
or significant withdrawals, MPIF’s borrowings
may at times exceed the 50% target gearing
limit. In these instances, we will lower gearing
levels back to the target level as soon as
reasonably possible;
Example
Effective total return on equity at different
gearing levels before borrowing interest costs,
fees and tax
Assume an Investor invests $10,000, which
MPIF then combines with $6,666 of debt to make
a total investment of $16,666. This means that
the investment is geared to 40%. If the underlying
Property Securities return 10% p.a., the Investor
would receive a total return of $1,666, which
is equivalent to a return of 16.67% p.a. on the
Investor’s invested capital before borrowing
interest costs, fees and tax. Conversely if the
underlying Property Securities return was -10% p.a.
then the Investors return will be -16.67% The table
below illustrates how total annual returns on equity
are affected by different gearing levels and
Property Securities returns:
Gross annual returns on equity
Property
Securities
return p.a.
10%
MPIF gearing level
20%
30%
40%
if the gearing exceeds 55%, the Manager will
reduce the level of gearing to the Manager’s
target level as soon as reasonably possible,
but in any case within a month;
■
temporarily halting withdrawals and selling
underlying assets in the unlikely event that gearing
exceeds 60%. This will assist in reducing gearing
to appropriate levels within the shortest reasonable
time. We will resume processing of withdrawals
when the gearing levels have been rectified;
■
actively monitoring the gearing of the Property
Securities market to ensure that any additional
gearing is appropriate; and
■
managing the level of borrowing in the event
the market deteriorates to ensure the Fund’s
forecast investment income exceeds forecast
borrowing interest costs. If interest costs rise
and/or Property Securities distribution yields
fall, the target gearing level will be adjusted
below 50%.
50%
12.50% 14.29% 16.67% 20.00%
5%
6.25%
7.14%
8.33% 10.00%
0%
0.00%
0.00%
0.00%
-5%
-6.25%
-7.14%
-10%
■
0.00%
-8.33% -10.00%
-12.50% -14.29% -16.67% -20.00%
Note: Excludes any impact of borrowing interest costs, fees and tax.
The gross returns above are not a reliable
indicator of future returns. Illustrative returns
do not provide, and should not be considered
as providing, a prediction or forecast as to
future returns of MPIF.
Macquarie Property Income Fund | Product Disclosure Statement
7
Gearing | continued
4.2
Gearing Policy continued
The example below shows how the distribution yields of Property Securities and interest rates are used to determine
appropriate gearing levels.
If the projected distribution yield on the underlying investments was 6% p.a. and the projected borrowing interest
cost to MPIF was 9% p.a., then the Gearing Policy dictates the maximum targeted gearing level be 44%
(refer to the bolded figure in the table below). This means every $10,000 of assets in MPIF would comprise
a maximum of $4,400 of debt.
Target levels of gearing
Property
Securities
distribution
yield p.a.
4.3
Borrowing interest cost p.a.
6%
7%
8%
9%
10%
5%
50%
48%
41%
35%
31%
6%
50%
50%
50%
44%
38%
7%
50%
50%
50%
50%
47%
8%
50%
50%
50%
50%
50%
Lenders to MPIF
MPIF can access debt from a variety of sources including companies associated with the Macquarie Group.
On average, we expect the Fund’s borrowing interest costs will be attractive compared with the borrowing interest
costs of an individual’s margin lending facility.
We will use MPIF’s assets as security for borrowings. This benefits Investors by reducing borrowing interest costs
and providing better access to funding. The Fund’s lenders will have priority over Investors for the Fund’s assets in
order to repay the outstanding loan balance. Borrowings are deducted from gross assets in calculating the Net Asset
Valuation Unit Price. MPIF’s lenders may require MPIF assets to be sold if there is a default under the lending facility.
For further information about the risks of investing in MPIF, see Section 5.
Investors do not need to provide any security to invest in MPIF and will not be liable at any time for more than the
capital they have invested. All borrowing interest costs, as well as associated expenses such as establishment fees,
commitment fees, legal expenses, government charges and transaction fees, are paid by the Fund. Where MPIF
borrows from an entity that is part of the Macquarie Group, loan terms, including the interest rate paid by MPIF,
will be on arms-length terms i.e. charged at normal commercial rates (refer Section 7.10).
8
5 Risks
5.1
Risks
natural phenomena, or factors specific to
the property such as insurance losses or
environmental contamination;
As with all investments, an investment in MPIF
will be subject to risks, some of which are outside
our control.
■
The risk that the assets invested in by MPIF
become illiquid, making it difficult to buy or sell
the investments at a fair price. This can result
in delays in rebalancing the investment portfolio
and gearing, and delays in processing MPIF
applications and withdrawals; and
If they eventuate, these risks may lower (or even
halt) your distributions and/or reduce (or even
eliminate) the capital value of your investment.
The risks may also create investment value
volatility, especially over short time periods.
Before deciding whether to invest, you should
consider your attitude towards potential risks.
■
Property Securities risk – the effect of general
share market conditions on the value of the
underlying Property Securities;
■
property risk – the risk that property values
of the underlying assets in the Property
Securities decline; and
■
This risk includes legal and political risk and
the potential for movements in exchange rates
to affect capital values and income earned
in other currencies.
Movements in foreign exchange rates may
affect the returns from, and asset values
of, MPIF’s underlying investments.
gearing risk – the risk that gearing amplifies,
positively or negatively, movements in the value
of the investment in the Fund.
Typically, Property Securities managers have
their own hedging strategies in place that seek
to minimise the impact of foreign exchange
movements on income streams.
These and other risks are outlined in more detail below.
You should read this PDS in its entirety and consider
consulting your accountant, stockbroker, lawyer
or other adviser.
An investment in Property Securities is generally
a medium to long-term investment (usually more
than five years).
5.2
Asset class risks
These risks relate to investing in the asset classes
that MPIF invests in i.e. listed Property Securities:
■
Property Securities risk
The carrying value of the pool of Property
Securities in which MPIF (or its underlying
Property Securities Funds) invests may be
negatively influenced by general investment
risks and other asset risks, but also by general
share market conditions.
The distributions and capital gains paid by the
underlying Property Security to investors may
vary due to changing profitability (e.g. changes
in underlying rental rates), economic conditions
and the quality of the management of the
entities or trusts;
■
Property risk
Values and returns on the underlying real estate
assets will be affected by changes in property
market conditions including increases in supply
or falls in demand in any of the property market
sectors, rental levels, property outgoings,
investor demand levels, business confidence,
Country and foreign exchange risk
The risk associated with some Property
Securities having underlying investments
outside Australia.
The risks discussed below are not exhaustive.
The following are key risks of an investment in MPIF:
■
Liquidity risk
5.3
Fund investment risks
These risks relate to the performance of the Fund:
■
Gearing risk
MPIF is a geared investment product.
Gearing amplifies the impact of any upward
or downward movements in the value of the
investments of the Fund.
In extreme instances, the gearing strategy could
result in a total loss of capital if the Fund was
geared at 50% and the Property Securities
market fell by 50% or more before the Manager
could respond. Equally, gearing will enhance
potential returns when the market is rising.
As part of managing MPIF in accordance
with the Gearing Policy, there is the possibility
of being required to liquidate investments
at depressed prices.
MPIF’s primary exposure is to Australian listed
Property Securities. Over the long term,
Australian listed Property Securities have seen
lower levels of return volatility than that of the
broader Australian share market. However,
historical levels of return volatility may not
occur in the future;
Macquarie Property Income Fund | Product Disclosure Statement
9
Risks | continued
5.3
Fund investment risks continued
■
Investment selection risk
The risk that specific investments made by
MPIF will not achieve the Fund’s performance
objective or perform as well as others;
■
Interest rate risk is dependent on economic
conditions and lender’s perceived risk of default
of MPIF at the time finance is sought and
the prevailing policy of the Reserve Bank
of Australia;
Derivative risk
The risk that the derivatives used by the Manager
or the manager of the underlying Property
Securities Fund may result in significant losses
for the size of the outlay on the derivative.
Interest rate and derivative risks are mitigated by
our ability to hedge interest rates, and the fact
that our Gearing Policy includes an interest cover
test, effectively reducing MPIF’s gearing as
interest rates rise; and
■
Manager risk
By investing in MPIF, you delegate your control
over operations and investment decisions
to us. The success of the Fund depends largely
on our performance or that of our external
service providers, including the manager
of any underlying Property Securities Funds,
and is not assured.
10
General risks
These risks relate to the overall risk inherent
in most investments:
■
Economic and market risk
The risk that changes in the economy and
market conditions affect asset returns and
values, which in turn result in reduced
distributions and falls in the Buy Unit Price/
Sell Unit Price;
Interest rate risk
The risk that interest rates will rise. This may
have material, adverse impacts on the Fund’s
activities, financial position, ability to gear
and distributions.
■
5.4
■
Inflation risk
The risk that the rate of inflation is higher than
the return received on investments; and
■
Legal, regulatory and tax risk
The risk that changes in any law, regulation,
tax or government policy affecting MPIF’s
business (which may or may not have
a retrospective effect) has an impact
on the Fund’s performance and returns
to Investors.
6 Fees and other costs
6.1
Fees and other costs
Did you know?
Small differences in both investment performance and fees and costs can have a substantial
impact on your long term returns.
For example, total annual fees and costs of 2% of your fund balance rather than 1% could reduce
your final return by up to 20% over a 30 year period (for example, reduce it from $100,000 to $80,000).
You should consider whether features such as superior investment performance or the provision
of better member services justify higher fees and costs.
You may be able to negotiate to pay lower contribution fees and management costs where
applicable. Ask the Fund or your financial adviser.
To find out more
If you would like to find out more, or see the impact of the fees based on your own circumstances,
the Australian Securities and Investments Commission (ASIC) website (www.fido.asic.gov.au)
has a managed investment fee calculator to help you compare different fee options.
This section shows fees and other costs that you may be charged. These fees and costs may be deducted
from your money, from the returns on your investment or from the Fund’s assets as a whole.
Taxes are set out in Sections 6.2 and 7.7.
You should read all the information about fees and costs because it is important to understand their impact
on your investment.
Fees when your money moves in or out of the Fund
Type of fee or cost
Amount
How and when paid
Establishment fee
Nil
Not applicable.
Nil1
Not applicable.
Nil1
Not applicable.
Nil
Not applicable.
The fee to open your
investment
Contribution fee
The fee on each amount
contributed to your
investment
Withdrawal fee
The fee on each amount
you take out of your
investment
Termination fee
The fee to close your
investment
1
A buy/sell spread applies to investments in MPIF. See ‘Transaction Costs’ on page 15.
Macquarie Property Income Fund | Product Disclosure Statement
11
Fees and other costs | continued
6.1
Fees and other costs continued
Management costs
Type of fee or cost
Amount
How and when paid
0.885% p.a. of the
gross MPIF assets
The Management Fee is calculated daily, accrued
in the Net Asset Valuation Unit Price daily and payable
to the Manager quarterly. The Management Fee
is paid out of the assets of MPIF. This fee may
be negotiated by certain types of Investor (see
Section 6.2).
12% of any
out-performance
over the Benchmark
Hurdle capped at
0.90% p.a. of daily
gross MPIF assets
The fee is payable if:
The fees and
costs for managing
your investment
Management fee
Base Component
Management fee
Incentive Component2
■
MPIF’s performance for the 12 months
up to that day is positive; and
■
MPIF performance for the 12 months up to
that day is greater than the Benchmark plus
2% (Benchmark Hurdle).
The fee rate is the lesser of:
■
12% (applied at the equivalent daily rate),
of MPIF’s out-performance over the Benchmark
Hurdle on the relevant day; or
■
0.90% p.a. of gross assets (applied at the
equivalent daily rate).
The Management Fee is calculated daily, accrued in the
Net Asset Valuation Unit Price daily and payable to the
Manager quarterly. The Management Fee is paid out
of the assets of MPIF. This Fee may be negotiated
by certain types of Investor (see Section 6.2).
Expenses2
Up to 0.20% p.a.
of gross MPIF assets
These are payable when incurred. They are based on
MPIF’s gross assets and will accrue in the Net Asset
Valuations Unit Price daily. If paid initially by us, then they
will be reimbursed on presentation of the relevant invoices.
Amount
How and when paid
Service fees
Type of fee or cost
Investment switching fee Nil
The fee for changing
investment options
2
12
From 1 March 2008.
Not applicable.
Example of annual fees and costs
This table gives an example of how the fees and costs for this product can affect your investment over a 1 year
period. You should use this table to compare this product with other managed investment products.
Example management costs1
Balance of $50,000 with a contribution of $5,000 during year
Contribution fee
Nil
For every additional $5,000 you put in you
will be charged $0.
PLUS Management costs1
0.885% p.a.
And, for every $50,000 you have in the Fund
you will be charged $885 each year.2
EQUALS Cost of fund
If you had an investment of $50,000 at the beginning
of the year and you put in an additional $5,000 during
that year, you would be charged fees of: $8853.
What it costs you will depend on the investment
options you choose and the fees you negotiate
with your fund or your financial adviser.
6.2
1
Please note that the management costs may be higher in the future having regard to the introduction of the Incentive Component on 1 March 2008.
2
These figures assume that $50,000 is invested for the full year and that any additional investment is only made at the end of the year.
These figures also assume that the Fund is geared at 50% during the whole year.
3
Additional fees may apply.
Additional explanation of fees and costs
Management Fee
The Management Fee is calculated daily, and accrued
in the Net Asset Valuation Unit Price daily (subject to
the terms outlined below). It is deducted from the
Fund’s assets, and paid to the Manager quarterly.
The Management Fee comprises a base component
and an incentive component.
(i) Management Fee – Base Component
The Manager will receive a fee of 0.885% p.a.
(applied at the equivalent daily rate) of gross assets
(Base Component).
The Manager pays any management fees
charged by underlying fund managers from
the Base Component.
(ii) Management Fee – Incentive Component
From 1 March 2008, if the Manager out-performs
the Benchmark Hurdle, it will earn a fee of 12% of
any out-performance over the Benchmark Hurdle
(Incentive Component), as outlined below:
The Manager will limit any Incentive Component
payable to 0.90% p.a. of gross assets (applied
at the equivalent daily rate).
The fee is payable if:
■
MPIF’s return for the 12 months up to that day
is positive; and
■
MPIF’s return for the 12 months up to that day
is greater than the return of the Benchmark for
that 12 months plus 2% (Benchmark Hurdle).
When payable, the Incentive Component fee rate
is the lesser of:
■
12% (applied at the equivalent daily rate), of
MPIF’s out-performance over the Benchmark
Hurdle on the relevant day; or
■
0.90% p.a. of gross assets (applied at the
equivalent daily rate).
Where a fee is applicable, it is calculated as the
fee rate multiplied by gross assets for that day.
As the Incentive Component is based on MPIF’s
Performance over a 12 month period, the Incentive
Component would still be payable, for example, where
the Fund decreased in value on the last day of the period,
provided that MPIF had positive performance for the 12
month period and out-performed the Benchmark Hurdle.
Examples as to how the Incentive Component is
calculated are set out in detail in this Section.
The Incentive Component is applied differently
to performance / incentive fees charged by some
managed investment schemes. These differences
may lead to alternative fee outcomes for the Manager
when compared to other fee structures (e.g. a fee
where none would ordinarily be payable, an increased
fee or a reduced fee). The Manager believes that the
Incentive Component helps to align the interests
of the Manager with those of Investors as it rewards
the Manager for consistent out-performance.
Payment of Management Fee in cash or units
Instead of cash, we may receive part or all of the
Management Fee as units in MPIF, issued at the
prevailing Net Asset Valuation Unit Price for MPIF.
Where we elect to be paid in units, cash distributions
to Investors for the relevant period may include an
amount equivalent to the Management Fee that has
been transferred from capital.
Macquarie Property Income Fund | Product Disclosure Statement
13
Fees and other costs | continued
6.2
Additional explanation of fees and costs
continued
For the avoidance of doubt, the fee is payable if:
■
MPIF’s return for the 12 months up to that day
is positive; and
■
MPIF’s return for the 12 months up to that day
is greater than the return of the Benchmark for
that 12 months plus 2% (Benchmark Hurdle).
Deferral of Management Fee
The Manager may defer payment of its fee for any
period. Where payment is deferred, the fee is taken
into account in calculating the Net Asset Valuation
Unit Price until it is paid.
Reduction of Management Fee
In some instances, the Manager may reduce the
Management Fee for those Investors that the
Corporations Act denotes ‘sophisticated’, ‘professional’
or ‘wholesale’ investors. This is generally because they
invest large amounts of money in MPIF. Eligible
Investors can negotiate this fee by contacting us
using the details on the inside back cover.
The constitution allows the Manager to receive total
management fees of 5% p.a. of gross assets, and
a further 1% p.a. of gross assets as a trusteeship
fee; and to recover certain costs and expenses.
The Manager will not enter into individual fee
arrangements with other types of Investors.
Other fees permitted by MPIF’s constitution are an
entry fee of up to 5%, a termination or exit fee of
up to 5% and a switching fee of up to 5%.
Interim Fee Period
The Incentive Component will be calculated differently
up to 19 December 2008 (Interim Fee Period). The
Interim Fee Period will eliminate the Manager’s ability
to benefit from any known historical out-performance
up to and including 19 December 2007.
The Manager is permitted to accept lower fees than
it is entitled to receive under the constitution, and
has agreed to limit the Management Fees to those
outlined in this Section.
During the Interim Fee Period, the Manager will
apportion MPIF’s performance into 2 parts, as follows:
■
Past Period – up to and including 19 December
2007; and
■
Future Period – from 19 December 2007
to 19 December 2008.
In addition, the ‘plus 2%’ in the Benchmark Hurdle
will be apportioned pro-rata on a daily basis between
the two periods, to ensure that each Period bears its
appropriate share of this amount in the calculation.
On any day where MPIF out-performed the
Benchmark Hurdle in the Past Period:
–
–
that out-performance will be deemed to be
zero (for the purpose of calculating the Incentive
Component); and
the MPIF return for that period will be deemed
to be equal to the Benchmark Hurdle (for the
purpose of calculating whether MPIF’s return for
the 12 month period is positive and greater than
the Benchmark Hurdle – see below).
On any day where MPIF under-performed the
Benchmark Hurdle in the Past Period, that underperformance will be included in the calculation
of the Incentive Component.
After adjusting, if applicable, the Past Period outperformance and the MPIF return for that period as
outlined above, the Past Period and Future Period
performance and return will be combined to
determine the performance and return for the
12 month period up to the relevant day.
14
Maximum fees and changes to fees
The Management Fee currently charged by the
Manager is less than the maximum fee permitted
by MPIF’s constitution.
The Manager will give at least two months notice
before changing the fees.
The Manager may increase fees, introduce fees
not currently charged, or recover costs or expenses
not currently recovered from the MPIF during the
currency of this PDS without your consent; subject
to the terms of MPIF’s constitution (refer Section 7.9).
Various factors may influence a fee or expense
recovery change. These factors may include
increased operating costs, the desire for increased
profitability or the impact of general market forces.
Management Fee –
Incentive Component examples
Example 1
After the Interim Fee Period, say 1 March 2009
If from 1 March 2008 to 1 March 2009 the
12 month Benchmark return is 15.0%, then
the Benchmark Hurdle is 17.0%.
Assume that the 12 month MPIF return
is 20.0% and that the gross assets for MPIF
on 1 March 2009 were $200 million.
The out-performance for the period is 3.0%.
The Incentive Component is calculated as
12.0%, multiplied by the out-performance
of 3.0%. This results in a fee rate of 0.36% p.a.
This is less than 0.90% p.a.. Therefore the fee
rate of 0.36% p.a. applies. Applying the fee rate
to the gross assets on 1 March 2009 (divided
by 365 as the fee is calculated daily), the
Incentive Component for that day is $1,972.
As the Incentive Component is based on MPIF’s
Performance over a 12 month period, the Incentive
Component would still be payable, for example,
where the Fund decreased in value on the last
day of the period, provided that MPIF had positive
performance for the 12 month period and
out-performed the Benchmark Hurdle.
Example 2
During the Interim Fee Period, say 15 June 2008
If from 15 June 2007 to 19 December 2007, the
Benchmark return is 8.0% and the MPIF return is
6.0%, then MPIF under-performed the Benchmark
Hurdle by -3.0% (half of the ‘plus 2%’ is allocated
to the Past Period in this example).
If from 19 December 2007 to 15 June 2008,
Benchmark return is 7.0% and the MPIF return
is 10.0%, then MPIF out-performed the Benchmark
Hurdle by 2.0% (half of the ‘plus 2%’ is allocated
to the Future Period in this example).
The adjusted performance is therefore -1.0%.
No Incentive Component is payable for this day.
Expenses
From 1 March 2008, all expenses that the Manager
incurs in the proper performance of its duties (subject
to the cap set out below) will be paid or reimbursed
out of MPIF’s assets in accordance with the
constitution. Relevant expenses include expenses such
as registry charges, accounting fees, bank fees, legal
fees, the cost of printing annual financial statements,
postage, audit fees, and consultants’ fees.
The Manager will cap the amount of expenses
that are reimbursed from MPIF to the Manager
at 0.20% p.a. of gross MPIF assets. If actual
expenses exceed this cap, the Manager will
bear the excess amount.
Commission and other payments
Investors may elect to pay their financial
adviser an upfront fee in respect of each
investment in MPIF out of their Application
Monies by completing the relevant section
in the Application Form.
If you are a direct Investor and you use a financial
adviser, you can elect to have us deduct from
your Application Monies a nominated percentage of
between 0% and 4.4% (including GST) of Application
Monies and forward that amount to your financial
adviser, as named on the Application Form. We will
apply the balance of the Application Monies towards
the purchase of units in MPIF.
Investors may also elect to pay their financial
adviser an ongoing fee by completing the relevant
section on the Application Form.
If you are a direct Investor, you can elect to have
us deduct the ongoing fee charged by your financial
adviser at least annually, either from distributions
or by the redemption of sufficient units.
The ongoing fee will be calculated as the
nominated percentage of between 0% and
1.1% p.a. (including GST) of your average daily
net equity investment balance.
You may negotiate the amount of commission
payable to your financial adviser directly with
your financial adviser by contacting them. If you
do not use a financial adviser, no commission,
upfront fee or ongoing fee will be deducted.
Any instruction in relation to ongoing fee
supersedes all previous instructions.
Where investments are made through an IDPS
Operator, the Manager may pay fees from its
management fee to the IDPS operator. The Manager
can also draw on its own resources to provide
marketing and product support to IDPS Operators.
The Manager may also make payments from its fees
to financial advisers. This is not an additional charge
to Investors and does not affect the investment
returns of MPIF.
Transaction Costs
Transaction Costs represent the Manager’s estimate
of the transaction costs incurred by MPIF and its
underlying investments when buying and selling
investments. These Transaction Costs are
an additional cost to an Investor.
Transaction Costs are recovered through
adjustments to Unit Prices. That is, the Unit Price
at which you invest and the Unit Price at which
you redeem from MPIF will differ because of the
Transaction Costs incurred by MPIF when buying
and selling investments. This is called the buy/sell
spread. MPIF buy/sell spread is currently 0.6% but
may vary between 0.3% and 0.6% (for both buy
spread and sell spread) based on the level of
gearing in MPIF.
The current level of buy/sell spread will be seen
in the Buy Unit Price and Sell Unit Price quoted
daily on the MPIF website at
www.macquarie.com.au/propertyincomefund.
GST
The fees described above include GST less any
reduced input tax credits. If the Manager becomes
liable to pay GST in respect of any matter arising
from the operation of MPIF, then in addition to any
amount to which the Manager is entitled, the
Manager is also entitled to be paid or reimbursed
an amount equal to the amount of the GST liability.
Tax
For information on taxation, please refer to
Section 7.7.
Macquarie Property Income Fund | Product Disclosure Statement
15
7 Other information you need to know
7.1
Investing through an IDPS
7.4
When an investor invests into a fund through
an IDPS Operator, the units are registered in the
name of the IDPS Operator. The IDPS Operator
is therefore entitled to certain investor rights, such
as the right to receive reports and statements,
to attend meetings and to make complaints.
Net realised capital gains (if any) will be
included in the Unit Price during each financial
year and distributed to you as part of the
June quarter distribution.
7.5
If you are investing through an IDPS, you should
contact your IDPS Operator regarding these
matters. You should also complete the application
form provided by the IDPS Operator. Reports and
other information will be provided to you by them.
All enquiries and additional investments should also
be made through the IDPS Operator.
If you do not make an election, we will automatically
reinvest any income distributions as at the last day
of that quarter (ex-distribution), at the Buy Unit Price
for that day. You can change this arrangement at
any time by providing us with a minimum of 14 days
notice in writing.
Valuation of assets
If you do not provide valid bank account details
to receive your distribution, it will be automatically
reinvested into the Fund.
The Fund’s assets are valued daily.
7.3
Unit pricing
Unit Prices are calculated daily. They are based
on MPIF’s net asset value divided by the number
of units on issue and adjusted for Transaction
Costs. Calculation of the Fund’s net asset value
includes cash balances, the value of investments
and accrued investment income less debt,
accrued management fees, loan interest and
any other liabilities.
7.6
In the event of significant movements in the
underlying investments, Unit Prices may be
calculated more than once on a business day.
If you are a direct Investor, you can find out
the current and historical Unit Prices by calling
us on 1300 652 790 or by visiting the website:
www.macquarie.com.au/propertyincomefund.
IDPS Investors should contact the IDPS Operator
to find out the Unit Price.
Under the MPIF constitution, the Manager or its
nominee has certain discretions in calculating unit
prices. We have a documented policy in relation to
the exercise of these discretions. A copy of this
policy and documents relating to it are available free
of charge by contacting us on 1300 652 790.
Tax File Number (TFN)
It is not compulsory to quote a TFN, and it is not
an offence if you decline to provide it. However,
if you do not quote a TFN or an exemption, your
income distributions will be taxed at the highest
marginal rate plus the Medicare Levy. You can
provide your TFN on the Application Form when
making your initial investment in MPIF, or by
advising the registry in writing. Collection of TFNs
is authorised by tax laws and the Privacy Act.
For more information about the use of TFNs
please phone your nearest tax office.
The Buy Unit Price and Sell Unit Price will differ
from the NAV per unit because they reflect
Transaction Costs. They will be used for each
investment and redemption.
16
Distribution payments and reinvestment
of distributions
You may elect to have distributions paid directly into
an Australian bank account or other account with
a financial institution (where there is a branch in
Australia), or as a payment to your IDPS Operator
if you have one. You may also reinvest your
distributions into additional units in MPIF. Simply
indicate your preferred option on the Application
Form. We will not pay distributions by cheque.
We have authorised the use of this PDS as
disclosure to investors and prospective investors of
an IDPS. Investors who access, or wish to access,
the Fund through an IDPS may rely on this PDS.
7.2
Income distributions
We intend to distribute net income (if any) quarterly,
within two weeks of the end of each March,
June, September and December quarter.
IDPS is an Investor Directed Portfolio Service
provided by an IDPS Operator. The IDPS Operator
makes investments into MPIF on behalf of its clients
i.e. IDPS Investors, and provides a reporting service
to those Investors. Master trusts and wrap accounts
are types of IDPS.
7.7
Tax
Some potential tax implications for investors have
been explained below. This is not a complete
summary of the income tax implications which may
arise, in individual circumstances. Any discussion
of tax in this PDS refers to Australian tax law and
practice applicable as at the date of this PDS
and these may change at any time.
We do not provide tax advice. You should consult
your tax adviser if you have any queries regarding
the application of income tax or capital gains tax
to your investment portfolio.
7.7.1 Income tax
Your share of the taxable income of MPIF,
including reinvested income, will be included in
your assessable income in the year of entitlement.
Income tax is not paid by the Fund provided that
all the taxable income is distributed to Investors.
7.7.5 Franked dividends
The Fund may receive franked dividend income.
You will be advised of any franking credits attached
to the distribution along with all relevant tax and
accounting information at financial year end.
7.7.6 Non-residents
7.7.2 Capital gains tax
Your assessable income each year includes net
realised capital gains i.e. gains after offsetting capital
losses. Capital gains tax on investments may arise
from part of the distribution made to Investors from
MPIF which may represent distributed capital gains
earned by MPIF, or from redeeming MPIF units
at more than their cost base or a reduced
cost base.
Deductions required by Australian tax law will be
made from distributions to Investors who are nonresidents for Australian income tax purposes.
7.7.7 Foreign tax credits
Foreign tax credits may be received due to some
of the underlying property trusts owning assets
outside Australia. For tax purposes, Australian
residents must include in their assessable income,
their share of any foreign taxes paid by the Fund.
Investors will normally be entitled to a tax credit
for foreign tax paid by MPIF.
7.7.3 Deductibility of commissions
Where you elect to pay your financial adviser:
–
–
an upfront application fee – this commission
will generally be treated as capital and will form
part of your cost base; or
7.8
Reporting
For direct Investors, we will:
an ongoing fee – where this commission is
payable to a financial adviser as consideration
for ongoing account maintenance and
administration services to the Investor, this
fee will generally be treated as an income
tax deduction when the fee is actually paid
to the adviser.
■
send confirmation of every transaction
(applications and withdrawals);
■
provide quarterly updates of MPIF’s performance;
■
send you a tax statement after the end of the
financial year to help with your tax return; and
■
send you MPIF’s annual financial statements
if you request them (available approximately
September).
7.7.4 Tax deferred income
Distributions will have a component that is tax
deferred. The tax deferred component represents
the depreciation of plant and equipment and
improvements associated with the property asset
and building allowance deductions. Tax deferred
income is not taxable in the year of distribution,
but will be applied to reduce your unit cost base,
increasing the taxable capital gain (or reducing the
taxable capital loss) on any future sale. Where the
total tax deferred component exceeds your cost
base, the excess will be taxed as a capital gain
in the year of payment.
If you are investing through an IDPS Operator,
please contact them directly for your reporting
needs. We will provide regular information directly
to the IDPS Operator.
7.9
Your relationship with the Fund and with us
Your relationship with the Fund and with us is governed
by this PDS, MPIF’s constitution, the Corporations
Act and other laws such as the general law relating
to trusts and legislation about the duties of trustees.
The following general observations can be made
about MPIF’s investment strategy and its impact
on tax deferred income:
This PDS sets out some of the material rights of
members of the Fund, many of which are contained
in the constitution. The constitution deals with the
following matters:
–
■
allows us or Investors (subject to certain
thresholds) to call meetings of Investors and
describes how meetings will be run;
■
provides for us to retire in certain circumstances;
■
allows us to extend the period in which to
redeem units in certain circumstances;
■
gives us the right to terminate the Fund;
■
allows us to vary the constitution if the change
does not adversely affect Investors’ rights,
otherwise the change is subject to a resolution
of Investors;
–
borrowing interest costs should generally be
deductible and can be used to offset taxable
income of MPIF, reducing the net taxable income
distributed to Investors. The portion of tax
deferred income could be higher than it would
be in the absence of gearing; and
where MPIF produces a net taxable loss for the
year, this loss can be carried forward and used
to offset against future income except where
taxation laws prevent this. In addition, a net
taxable loss for the year may result in the loss
of otherwise available franking credits or foreign
tax credits for the year.
Macquarie Property Income Fund | Product Disclosure Statement
17
Other information you need to know | continued
7.9
Your relationship with the Fund and with us
continued
■
limits our liability if we act properly, in good faith
and without negligence;
■
allows us to charge an entry fee of 5%, an
exit fee of 5% and a switching fee of 5%.
Until further notice, we will not charge these
fees. Please refer to Section 6 for current
fees and costs;
■
allows us to receive a management fee of 5%
p.a. of the value of MPIF’s gross assets and 1%
p.a. of the value of MPIF’s gross assets thereof
as a trusteeship fee. Until further notice, we have
agreed to limit the management fee to the Base
and Incentive Components. Please refer
to Section 6 for current fees and costs;
■
gives us the right to recover from the Fund
all proper and reasonable expenses, and the
entitlement to be indemnified from MPIF for
liabilities that we properly incur in relation to
MPIF. We have currently agreed to cap the
recovery of normal expenses as outlined in the
description of ‘Expenses’ under the heading
‘Additional explanation of fees and costs’ in
Section 6. There is no limit in the constitution
on expense recovery; and
■
makes provisions for the handling of
Investors’ complaints.
If you wish to obtain a copy of the constitution,
please contact us (refer to the inside back cover).
In the event of any inconsistency between this PDS
and the constitution, the constitution will prevail
to the extent of the inconsistency.
7.10
Related party transactions
We may seek professional services for the
Fund from related parties. The fees for these
services will be charged on an arm’s length basis
and at normal commercial rates to the Fund.
Services could include funds administration and
management, merger and structuring, accounting
and compliance, financial restructuring, loans,
interest rate management, cash management
products, product distribution and corporate
advisory. All parties and the fees chargeable
for these services are subject to the approval
of our independent directors.
Fees may also be payable to related parties in
relation to any investment by the Fund in securities
managed by entities within the Macquarie Group.
These will be considered by MPIF’s Investment
Committee and approved by our independent
directors on a case by case basis.
18
Conflicts of interest
The Macquarie Group, as a diversified provider of
financial and investment banking services, engages
in a broad range of activities, including securities
underwriting, sales and trading; investment banking;
lending; merchant banking; financial advisory
services; investment research; asset management;
and other activities. In the ordinary course of
business, the Macquarie Group engages in activities
where its interests or the interests of its clients
may conflict with the interests of the Investors.
The discussion below enumerates certain actual
and potential conflicts of interests. By acquiring
units in the Fund, each investor will be deemed
to acknowledge the existence of such actual
and potential conflicts of interest.
Other Macquarie Group activities
It is possible that the Fund may seek to make
an investment, and in making that investment,
a member of the Macquarie Group may provide
services. Such members of the Macquarie Group
may earn fees from providing services to the Fund.
A member of the Macquarie Group may be
engaged to provide services or products to,
and receive customary fees and/or compensation
from, the Fund. Services include, but will not be
limited to, banking services.
Restricted activities
From time to time, in order to manage a conflict, the
Fund’s activities may be restricted due to regulatory
restrictions applicable to the Macquarie Group, and/
or its internal policies designed to comply with such
restrictions. As a result, there may be periods, for
example, during which the Fund may be restricted
from engaging in certain transactions.
Resolution of conflicts
Conflicts of interest concerning the Fund will be
resolved in accordance with the Macquarie Group
Conflicts of Interest Policy and applicable laws,
regulations and ASIC policy. Conflicts may be
resolved by disclosing, managing, or avoiding the
conflict. MDPML has an obligation to act in the best
interests of unitholders and will take this into
account when resolving a conflict. MDPML may
take action in the interests of the Macquarie Group
where those interests are not inconsistent with
those of of unitholders.
7.11
Complaints
7.14
Direct Investors
7.14.1 Disclosures
If you have an enquiry or complaint, you may
contact us by telephone on 1300 652 790 or by
writing to: Complaints Officer, Macquarie Direct
Property Management Limited, GPO Box 4294
Sydney NSW 1164.
We are also a member of the Financial Industry
Complaints Services (FICS). FICS is an independent
financial services industry complaints resolution body
that you may contact if you have a complaint that
is not satisfied within 45 days or if you are not
satisfied with our response.
To contact FICS, telephone its offices on:
1300 780 808 or write to it at PO Box 579,
Collins Street West, Melbourne VIC 8007.
IDPS Investors
IDPS Investors should contact their IDPS Operator
with queries, feedback or complaints.
7.12
Disclosures, consents and disclaimers
In the course of normal activity, the Macquarie
Group may have a financial interest in MPIF as
principal, financier or adviser. The Macquarie Group
may also provide loan, interest rate management
and cash management products to the Fund.
7.14.2 Consents and disclaimers
The parties below have given, and have not withdrawn
before the issue of this PDS, their written consent
to inclusion of their name, reports and/or statements
(as applicable) in this PDS, and any express references
to their name, reports and/or statements in the form
or context in which those references are made:
■
Computershare Fund Services Pty Limited
as registrar;
■
Permanent Trustee Australia Limited as
custodian of the Fund;
■
Macquarie Investment Management Limited
as manager of the Macquarie Property
Securities Fund; and
■
Credit Suisse Asset Management (Australia) Limited
as manager of the Credit Suisse Property Fund.
Cooling-off period
Direct Investors
You can request in writing to have your initial
investment cancelled within a 14 day cooling-off
period. The cooling-off period begins when the
transaction confirmation is received by you, or five
days after units are issued (whichever occurs earlier).
If you do notify us in writing of your decision to
cancel your investment during the cooling-off period,
the monies repaid to you will be adjusted for any
increase/decrease in the value of your investment
during the cooling-off period, any tax or duty
payable, and for reasonable administrative and
Transaction Costs incurred as a result of issuing,
and subsequently withdrawing, your interest in MPIF.
IDPS Investors and wholesale Investors
This cooling-off period does not apply to IDPS
Investors or wholesale Investors.
7.13
None of the parties above has made, or claims to
make, any statement that is included in this PDS
or any statement on which a statement made in this
PDS is based other than as specified above.
Each of the parties above, to the maximum extent
permitted by law, expressly disclaims and takes no
responsibility for any statements in, or omission
from, this PDS other than as consented to above.
Other than as required by law, no responsibility
is taken by us or by any of the parties above
for any statement made in connection with the
Fund or the offer, other than statements contained
in this PDS.
Labour standards and environmental,
social and ethical considerations
As decisions about the selection of underlying fund
managers are based primarily on economic
decisions, the Manager does not take into account
labour standards or environmental, social or ethical
considerations for the purpose of selecting, retaining
or realising investments for MPIF.
The Manager does not control the investment
decisions made by the underlying fund managers.
The underlying fund managers follow their own
internal policies when making investment decisions
for their funds.
Macquarie Property Income Fund | Product Disclosure Statement
19
8 Investing in the Fund
8.1
How to invest
If the registry receives your Application Form and
Application Monies prior to 2pm Sydney time on
a business day, units will be allotted to you on the
same day. Application Forms and Application
Monies received after 2pm Sydney time will be
processed on the next business day. You will
receive confirmation of each investment, including
the Buy Unit Price, the number of units issued and
date on which the units were issued. We will not
issue unit certificates.
To invest in MPIF, direct Investors need to complete
the Application Form and submit it to us. IDPS
investors apply via the IDPS Operator.
Investment amounts can be paid by cheque, direct
credit or electronic banking e.g. via real-time gross
settlement (RTGS). In order to pay your Application
Monies by direct credit, you need to transfer
the funds to the following account and send
a completed Application Form to the registry.
We reserve the right to decline part/all of any
application. You should keep a copy of the current
PDS and any information you receive from us for
future reference. You can obtain a hard copy of
this PDS from us via post, or by downloading
it from the website.
Account:
237110192
BSB:
182-222
Account name: Macquarie Direct Property
Management Limited – MPIF
Applications Account
Reference:
Name on Application Form
Note that your application cannot be processed
until the direct credit has been processed by your
financial institution.
Where we do not receive an accompanying
Application Form within one month of receiving
your Application Monies, we will return your
Application Monies.
8.2
Correct forms of registrable name
Only natural persons and legal entities are
allowed to hold MPIF units. Application must
be in the name(s) of natural person(s), companies
or other legal entities acceptable to the Fund.
At least one full given name and the surname
are required for each natural person. The name
of the beneficiary or any other non-registrable
name may be included by way of an account
designation if completed exactly as described
in the examples shown below:
Correct forms of registrable name
Type of investor
Correct form of
registrable name
Incorrect form of
registrable name
John Alfred Smith
J A Smith
Companies
Use company name, not abbreviations
ABC Pty Ltd
ABC P/L
ABC Co
Trusts
Use trustee(s) personal names, not the
name of the trust
Sue Smith
<Sue Smith Family A/c>
Sue Smith Family Trust
Deceased estates
Use executor(s) personal names, not the name(s)
of the deceased
John Smith
<Est Jane Smith A/c>
Estate of the Late Jane Smith
Clubs/incorporated bodies/business names
Use office bearer(s) names, do not use name
of the club etc
Michael Smith
ABC Tennis Association
<ABC Tennis Association A/c>
Superannuation funds
Use name of trustee of fund, not the name
of the fund
XYZ as Trustee for
<Jane Smith Pty Ltd
Super Fund A/c>
Individuals
Use given names, not initials
20
Jane Smith Pty Ltd
Superannuation Fund
8.3
How to make additional contributions
to your investment
If you are an existing Investor, you can make
additional investments of $5,000 or more to your
account. This is done in the same way as when you
make a new investment into MPIF. Please complete
the Application Form, making sure that you state
your existing account number.
8.4
How to reinvest your contributions into the Fund
You have the option to reinvest your income
distributions into MPIF or to receive distributions by:
■
direct credit to an Australian bank account or other
account with a financial institution (where there is a
branch in Australia), if you are a direct Investor; or
■
payment to your IDPS Operator, if you are an
IDPS Investor.
If you do not elect a method for receiving income
distributions, they will be automatically reinvested into
the Fund at the last day of the quarter (ex-distribution)
Buy Unit Price. You can alter this decision at any time
by providing a minimum of 14 days notice in writing.
If you do not provide valid bank account details
to receive your distribution, it will be automatically
reinvested into the Fund.
We will not pay distributions by cheque.
8.5
How to withdraw your investment
Withdrawals from MPIF by direct Investors may
be made by writing to the registry or by fax on
(03) 9473 2140. Withdrawals by IDPS Investors
are made via the IDPS Operator. Withdrawals
will only be made payable to the direct
Investor and proceeds directed to the account
nominated in the Application Form.
Where requests are received by the registry before
12 noon Sydney time on a business day, we will
endeavour to process withdrawals on the same day
and to make funds available to you or your IDPS
Operator (as applicable) within three business days.
The MPIF constitution allows a 30 day time period
after receipt by the registry of withdrawal requests
to make payment. These periods may be extended,
subject to MPIF’s constitution, in circumstances
outside the Manager’s control or at quarter end when
unit pricing is on hold while distributions are being
calculated. Please refer to Section 5.2, Liquidity risk.
8.6
Fax instruction conditions
By using the fax instruction service, you release
us from and indemnify us against all losses and
liabilities arising from any payment/action that we
make based on the instructions we receive by fax
bearing your account number and an apparent
signature of yours – even if the fax is not genuine.
You also agree that neither you nor anyone claiming
through you has any claim against us or the Fund
in relation to these payments or actions.
There is a risk that fraudulent fax withdrawal requests
can be made by someone who has access to your
account number and a copy of your signature. We
reserve the right to add further requirements at any
time to mitigate this risk.
8.7
How to monitor your investment
As a direct Investor, you will receive regular
communications from us regarding the performance
of the Fund. These communications include:
■
confirmation of every transaction (applications
and withdrawals);
■
distribution statements (at the end
for each quarter);
■
quarterly statement of account and
transaction summary;
■
monthly report available on the website;
■
quarterly Fund Updates;
■
daily Unit Price (current and historic) available
on the website;
■
independent research reports available
on the website; and
■
annual tax statements and annual
financial statements.
Some of this information is available on the website:
www.macquarie.com.au/propertyincomefund.
Information regarding the identity of MPIF’s current
Property Securities Fund managers (as updated
from time to time) is available on the MPIF website
at www.macquarie.com.au/propertyincomefund,
in the document located there and identified as
‘Underlying Fund Managers’. A paper copy of this
information is available free on request. The Manager
will also report the actual allocation invested in its
monthly report.
Alternatively, you may contact us directly to request
information regarding the performance of the Fund
and your investment.
Disclosing entity
As a disclosing entity, MPIF is subject to regular
reporting and disclosure obligations. Copies of
documents lodged with ASIC in relation to the Fund
may be obtained from, or inspected at, an ASIC
office. Of these, you have the right to obtain from
us, free of charge, a copy of documents lodged
with ASIC and any continuous disclosure notices
given by the Fund after the lodging of the annual
financial statements and before the date of this
PDS. If you request us to provide you with a copy
of these documents, we will do so within five days
of your request, in the way you choose – by email,
fax or post – or you can collect the documents
from our offices.
Macquarie Property Income Fund | Product Disclosure Statement
21
Investing in the Fund | continued
8.8
Use of personal information
You do not need to give us any personal information
requested in the Application Form or in any other
document or communication relating to the products
or services we supply you. However, without this
information, we may not be able to process your
application or provide you with an appropriate
level of service.
By completing the Application Form, you agree
to the Manager:
■
22
collecting, holding and using your personal
information to process your application,
as well as administering and managing the
Fund. This includes monitoring, auditing and
evaluating the Fund, modelling data, testing
data, communicating with you and dealing
with any complaints or enquiries;
■
providing your personal information to other
companies in the Macquarie Group as well as
to external service providers situated in Australia
or offshore, which provide services in connection
with MPIF. These may include for example,
mail houses or professional advisers;
■
using your personal information to offer products
or services that may be of interest to you unless
you request us not to;
■
supplying financial advisers with information
about your investment, if a financial adviser’s
stamp appears on the Application Form or
if you request us to do so in writing;
■
disclosing your personal information to other
parties if you consent or if we believe that the
law requires or permits us to do so, or to any
person proposing to acquire an interest in our
business, provided they agree to treat your
information in accordance with the Privacy Act
1988 (Cth); and
■
disclosing your personal information to the
Macquarie Group to offer products or services
that may be of interest to you unless you request
us not to allow this.
We will not sell your personal information to other
organisations to enable them to offer products
or services to you.
Under the Privacy Act 1988 (Cth), you may request
access to any of your personal information that
we hold.
You can contact us to make a request relating
to the privacy of your personal information.
Please contact us by telephone on 1300 652 790
or by writing to:
Privacy Officer
Macquarie Direct Property Management Limited,
GPO Box 4294
Sydney NSW 1164
Macquarie’s privacy statement can be found at:
www.macquarie.com.au/au/privacy_policy.htm
9 Glossary
Term
Definition
APIR Code
APIR Systems Limited Product Identification Code. APIR Codes are the standard method of identification
for investment products and are widely used within the financial services industry in Australia.
Applicant(s)
Person(s) who submit valid Application Form(s) pursuant to this PDS.
Application Form
An application form accompanying or attached to this PDS.
Application Monies
Monies received from Applicants in respect of their applications.
ARSN
All registered schemes have their own Australian Registered Scheme Number which is issued by ASIC.
ASIC
Australian Securities and Investments Commission.
ASX
ASX Limited (ABN 98 008 624 691) or the market operated by it, as the context requires.
Base Component
The component of the Management Fee that the Manager is entitled to receive for managing MPIF.
The fee rate is 0.885% p.a. (applied at the equivalent daily rate) of gross assets. Refer to Sections 6.1
and 6.2 of this PDS.
Benchmark
S&P/ASX 200 Property Accumulation Index.
Benchmark Hurdle
The hurdle return which MPIF must achieve for the Manager to be entitled to the Incentive Component.
It is calculated as the Benchmark return for the 12 months up to the relevant day plus 2%.
Buy Unit Price
The Unit Price at which Investors are issued units in MPIF. Calculated by increasing
the Net Asset Valuation Unit Price by the Transaction Cost amount.
Corporations Act
Corporations Act 2001 (Cth).
Gearing Policy
The criteria by which MPIF’s gearing (debt level) is reviewed and benchmark levels set by us.
This policy is maintained by us and can include quantitative and/or qualitative parameters.
IDPS
Investor Directed Portfolio Service. This service is provided by an IDPS Operator. The IDPS Operator
makes investments into MPIF on behalf of IDPS Investors and provides a reporting service to these
clients. Units in the Fund are registered in the name of the IDPS Operator. Master trusts and wrap
accounts are types of IDPS.
IDPS Investor
An Investor who invests in the Fund through an IDPS.
IDPS Operator
A company that operates an IDPS.
Incentive Component
The component of the Management Fee that the Manager is entitled to receive if it out-performs a
benchmark. The fee rate is 12% (applied at the equivalent daily rate) of MPIF’s out-performance over
the Benchmark Hurdle on the relevant day subject to a cap. Refer to Sections 6.1 and 6.2 of this PDS.
Interim Fee Period
The period up to 19 December 2008 during which the Incentive Component will be calculated as
described in Section 6.2.
Investors
Persons who have an interest in MPIF either directly or through an IDPS Operator.
Macquarie Group or Macquarie
Macquarie Group Limited (ABN 94 122 169 279) and its subsidiaries.
Manager/Responsible Entity
Macquarie Direct Property Management Limited (ABN 56 073 623 784), we, us, our.
Management Fee
The fee the Manager is entitled to for managing MPIF, comprising the Base Component
and Incentive Component.
MPIF/Fund
Macquarie Property Income Fund (ARSN 103 966 909).
Net Asset Valuation Unit Price
or NAV Per Unit
MPIF’s net asset value divided by the number of units on issue before any allowance
for Transaction Costs.
PDS
This Product Disclosure Statement.
Property Securities
Include securities, units or shares in listed property trusts, listed property companies, exchange traded
property funds, other listed securities with similar investment characteristics and units in Property
Securities Funds. These securities are generally listed on the ASX or an international stock exchange.
Property Securities Fund
A managed fund that invests in a diversified portfolio of Property Securities.
RTGS
Real-Time Gross Settlement. A payment system operated by the Reserve Bank of Australia in which
processing and ‘irrevocable’ settlement take place on a real time (continual) basis.
Sell Unit Price
The Unit Price at which Investors redeem units from MPIF. Calculated by decreasing the Net Asset
Valuation Unit Price by the Transaction Cost amount.
Transaction Costs
The per unit estimate of the transaction costs incurred by MPIF and its underlying investments when
buying and selling investments. The Buy Unit Price at investment and the Sell Unit Price at redemption
in MPIF will differ from the Net Asset Valuation Unit Price due to Transaction Costs.
Unit Price
The value of each MPIF unit on issue. It is the Net Asset Valuation Unit Price adjusted for Transaction
Costs (as required).
Macquarie Property Income Fund | Product Disclosure Statement
23
10 Application Forms
10.1 Application Form checklist
Please ensure that you check off each item in the
list below before submitting your investment
application.
¸
¸
Write the full name you wish to appear on the
statements of your unit holding. This must be
either your own name or the name of a legal
entity. Up to two joint Applicants may register.
Enter your Tax File Number (TFN), Australian
Business Number (ABN) or exemption code.
Where applicable, enter the TFN/ABN for
each Applicant. Quotation of your TFN
is not compulsory and failure to do so
will not affect your Application. However, if you
do not quote a TFN or an exemption, your
income distributions will be taxed at the
highest marginal rate plus the Medicare levy.
You can provide your TFN on the Application
Form when making your initial investment in
MPIF, or by advising the unit registry in writing.
Collection of TFNs is authorised by tax laws
and the Privacy Act. For more information
about the use of TFNs please phone your
nearest tax office.
¸
Enter your telephone number(s) including
area code, contact name and email address
in case we need to contact you.
¸
Enter your postal address for correspondence.
Communications to you from the registry will
be mailed to the person(s) and address as
shown or emailed to you if preferred. Only one
address can be entered for joint Applicants.
All addresses must be Australian addresses.
¸
¸
¸
Insert the amount of your Application Monies.
If you are already an account holder, insert
your existing account number.
Paying by cheque
Complete cheque details as requested. Make
your cheque payable to Macquarie Direct
Property Management Limited – MPIF
Applications Account in Australian currency
and cross it ‘Not Negotiable’. Your cheque
must be drawn in Australian dollars from an
Australian financial institution. Attach the cheque
to the Application Form.
Paying by direct credit
Transfer your funds to the following account.
Account: 237110192
BSB: 182-222
Account name:
Macquarie Direct Property Management
Limited – MPIF Applications Account
Reference: Name on Application Form
The amount should agree with the amount
shown in section 3. Sufficient cleared funds
should be held in your account, as cheques
returned unpaid will result in your Application
being rejected.
24
¸
Please complete account details of the
financial institution that you would like any
income distributions and any future withdrawal
proceeds to be paid to. If you do not provide
bank account details, your income distributions
will be automatically reinvested into MPIF.
¸
Advise if you would like to receive your investor
communications electronically, and whether
you would like to receive a copy of MPIF’s
annual financial statements.
¸
If you have a financial adviser you authorise
us to pay the adviser the nominated fees by
signing the Application Form.
¸
For adviser use only
Complete this section if you are the financial
adviser for this investment. Provide contact
details and nominate an agreed percentage
upfront and trail commission to be paid
to you. Your client authorises us to pay
you the nominated fees by signing the
Application Form. You must complete
this section and affix your adviser stamp
to receive commissions.
¸
Read the declaration before signing the
Application Form. The Application Form
is not valid unless signed by all Applicants.
A company must execute the Application
Form in accordance with its constitution
and the Corporations Act.
¸
Submit your completed Application Form
with cheque(s):
Mail to:
Macquarie Property Income Fund
Computershare Fund Services Pty Limited
Locked Bag 4
A’Beckett Street
Melbourne VIC 3000
MACQUARIE PROPERTY INCOME FUND
APPLICATION FORM
Enquiries 1300 137 895 (local call cost)
Please send completed Application Form to MPIF’s registry. Refer to Section 10.1 for details.
Complete this form using BLACK PEN and print well within the boxes in CAPITAL LETTERS. Mark appropriate answer boxes with a cross ( ✕ ).
This Application Form relates to the application for units in Macquarie Property Income Fund (MPIF ) under the PDS dated 19 December 2007 issued
by Macquarie Direct Property Management Limited (AFSL No. 226849). This form must be accompanied by the PDS when provided to any person.
Existing account number
OR new account
Tax File Number OR exemption code
Name of contact person
1 INVESTOR DETAILS
A INDIVIDUAL AND JOINT APPLICANTS – APPLICANT A
Title
Mr
Mrs
Miss
Ms
Other
Work phone number
Home phone number
Fax number
Mobile phone number
Given name(s)
Surname
Email address
Tax File Number OR exemption code
Work phone number
Home phone number
Fax number
Mobile phone number
D TRUST OR OTHER ENTITY
Please insert trustee or executor name in sections 1A to 1C (as applicable).
Name of superannuation fund, trust beneficiaries, deceased estate or
unincorporated association
Date of birth
D D
⁄
M M
⁄
Y Y Y Y
Tax File Number, ABN OR exemption code
Email address
2 CONTACT DETAILS
Mailing address (all correspondence will be sent to this address)
B JOINT APPLICANTS ONLY – APPLICANT B
Title
Mr
Mrs
Miss
Ms
Other
Given name(s)
Street no.
& name OR
PO Box
Suburb
State
Surname
3 INVESTMENT DETAILS
Please specify the amount you wish to invest.
This amount is inclusive of fees. $10,000 minimum initial investment.
Tax File Number OR exemption code
Work phone number
Home phone number
Macquarie Property Income Fund $
Are you paying by cheque?
Fax number
Mobile phone number
Date of birth
D D
Postcode
⁄
M M
⁄
Y Y Y Y
Email address
C COMPANY OR UNINCORPORATED ASSOCIATION OR INCORPORATED BODY
Name of company, unincorporated association or incorporated body
,
,
•
or funds transfer?
Note: Cash is not accepted. Cheques should be payable to:
Macquarie Direct Property Management Limited –
MPIF Applications Account.
All cheques should be crossed ‘Not Negotiable’ and must
be in Australian currency.
In order to pay your Application Monies by direct credit, you need
to transfer the funds to the following account and send this completed
Application Form to the registry:
Account: 237110192
BSB: 182-222
Account name: Macquarie Direct Property Management Limited –
MPIF Applications Account.
Reference: Name on Application Form.
ABN if applicable
Note that your application cannot be processed until the direct credit has
been processed by your financial institution, and your Application Form
has been received by the registry.
4 DISTRIBUTION PAYMENT ELECTION
7 ADVISER USE ONLY
Where would you like your distributions credited?
If you do not cross a box, your distributions will be automatically
reinvested into the Fund and additional units issued to you.
By stamping this Application Form, you are confirming that you hold a current
AFSL and are authorised to advise on managed investments.
Licensee name
Reinvested in the Fund
W E A L T H
Paid to an Australian bank account nominated below
F O C U S
P T Y
LTD
AFSL No.
BANK ACCOUNT DETAILS FOR DISTRIBUTION & WITHDRAWAL PAYMENTS
3 1 4 8 7 2
Complete this section if distributions are to be paid to a bank account. If you
do not complete this section, your distributions will be automatically reinvested
into the Fund and additional units issued to you. Note: if your address is an
international address, you cannot reinvest your distributions and you must supply
Australian bank account details to us for payment of your distributions.
Name of bank or financial institution
Licensee address
Street no.
& name or
PO Box
Suburb
State
Postcode
Business phone number
Branch name
Business fax number
1300 559869
BSB number
Account number
Licensee email address
–
Account name
Adviser company name
5 INVESTOR COMMUNICATIONS
Adviser name
Would you like to receive all investor communications (including but not limited
to annual financial statements, notices of meeting, proxy forms, distribution
statements, annual tax statements and other investor correspondence)
electronically including by email notification and internet access?
No
Yes
Provide your email address in section 1.
Would you like to opt in to receive a copy of MPIF’s annual financial statements
each year (electronic or hard copy per above election)? If you do not complete
this election, you will not receive a copy of the annual financial statements. An
electronic copy is available from www.macquarie.com.au/propertyincomefund.
No
Yes
Adviser address
Street no.
& name or
PO Box
Suburb
State
Postcode
Business phone number
Business fax number
Adviser email address
6 DECLARATION AND SIGNATURE
This application contains information about investing in MPIF and which
should be read before applying for units.
I /We agree to be bound by the PDS (including any supplementary PDS), and
the constitution of MPIF in which I /we invest. I /We acknowledge that investments
in MPIF are not deposits with or other liabilities of Macquarie Bank Limited,
MDPML or any Macquarie Group entity, and are subject to investment risk,
including possible delays in repayment and loss of income or principal invested.
I /We further acknowledge that none of Macquarie Bank Limited, MDPML or any
Macquarie Group entity guarantees the performance of MPIF, nor do they guarantee
the repayment of capital from MPIF, or any particular rate of return.
I /We further acknowledge that I /we accept and agree to the information
set out in Section 8 ‘Investing in the Fund’.
I/We being the potential holders of units in Macquarie Property Income Fund hereby
appoint the adviser whose details appear in section 7 of this Application Form and
authorise the Manager to pay the adviser commission in accordance with section 7 of
this Application Form. I/We acknowledge that the Manager may supply my/our adviser
with information about my/our account unless I/we instruct the Manager not to do so.
If fee details are not completed, no commission will be paid
to an adviser/broker.
Date
SIGN HERE
⁄
%
up to a maximum of 4.4% (including GST)
of initial and additional investments
Trail
0.30
%
up to a maximum of 1.1% p.a.
(including GST)
I would like to receive confirmation of
my client’s investments and withdrawals.
Electronic
X
Hard copy
I would like to receive a copy of my
client’s annual tax statements.
Electronic
X
Hard copy
Sole director and sole secretary
Authorisation of applicant B or company officer
Date
SIGN HERE
Name
If a company officer, you must specify your corporate title.
Other
D D
⁄
M M
⁄
Y Y Y Y
Adviser stamp
Trustee
Other
Director
SIGN HERE
Authorised representative number
If a company officer, you must specify your corporate title.
Secretary
Trustee
⁄
⁄
No
0.00
Date
⁄
Name
Director
X
Upfront
Please read the product disclosure statement before signing this form
Note: company accounts usually require two signatories.
Authorisation of applicant A or company officer
Yes
Have you agreed to take all or part of the commission?
If yes, select the percentage to be paid to you:
MACQUARIE PROPERTY INCOME FUND
APPLICATION FORM
Enquiries 1300 137 895 (local call cost)
Please send completed Application Form to MPIF’s registry. Refer to Section 10.1 for details.
Complete this form using BLACK PEN and print well within the boxes in CAPITAL LETTERS. Mark appropriate answer boxes with a cross ( ✕ ).
This Application Form relates to the application for units in Macquarie Property Income Fund (MPIF ) under the PDS dated 19 December 2007 issued
by Macquarie Direct Property Management Limited (AFSL No. 226849). This form must be accompanied by the PDS when provided to any person.
Existing account number
OR new account
Tax File Number OR exemption code
Name of contact person
1 INVESTOR DETAILS
A INDIVIDUAL AND JOINT APPLICANTS – APPLICANT A
Title
Mr
Mrs
Miss
Ms
Other
Work phone number
Home phone number
Fax number
Mobile phone number
Given name(s)
Surname
Email address
Tax File Number OR exemption code
Work phone number
Home phone number
Fax number
Mobile phone number
D TRUST OR OTHER ENTITY
Please insert trustee or executor name in sections 1A to 1C (as applicable).
Name of superannuation fund, trust beneficiaries, deceased estate or
unincorporated association
Date of birth
D D
⁄
M M
⁄
Y Y Y Y
Tax File Number, ABN OR exemption code
Email address
2 CONTACT DETAILS
Mailing address (all correspondence will be sent to this address)
B JOINT APPLICANTS ONLY – APPLICANT B
Title
Mr
Mrs
Miss
Ms
Other
Given name(s)
Street no.
& name OR
PO Box
Suburb
State
Surname
3 INVESTMENT DETAILS
Please specify the amount you wish to invest.
This amount is inclusive of fees. $10,000 minimum initial investment.
Tax File Number OR exemption code
Work phone number
Home phone number
Macquarie Property Income Fund $
Are you paying by cheque?
Fax number
Mobile phone number
Date of birth
D D
Postcode
⁄
M M
⁄
Y Y Y Y
Email address
C COMPANY OR UNINCORPORATED ASSOCIATION OR INCORPORATED BODY
Name of company, unincorporated association or incorporated body
,
,
•
or funds transfer?
Note: Cash is not accepted. Cheques should be payable to:
Macquarie Direct Property Management Limited –
MPIF Applications Account.
All cheques should be crossed ‘Not Negotiable’ and must
be in Australian currency.
In order to pay your Application Monies by direct credit, you need
to transfer the funds to the following account and send this completed
Application Form to the registry:
Account: 237110192
BSB: 182-222
Account name: Macquarie Direct Property Management Limited –
MPIF Applications Account.
Reference: Name on Application Form.
ABN if applicable
Note that your application cannot be processed until the direct credit has
been processed by your financial institution, and your Application Form
has been received by the registry.
4 DISTRIBUTION PAYMENT ELECTION
7 ADVISER USE ONLY
Where would you like your distributions credited?
If you do not cross a box, your distributions will be automatically
reinvested into the Fund and additional units issued to you.
By stamping this Application Form, you are confirming that you hold a current
AFSL and are authorised to advise on managed investments.
Licensee name
W E A L T H
Reinvested in the Fund
Paid to an Australian bank account nominated below
F O C U S
P T Y
LTD
AFSL No.
BANK ACCOUNT DETAILS FOR DISTRIBUTION & WITHDRAWAL PAYMENTS
3 1 4 8 7 2
Complete this section if distributions are to be paid to a bank account. If you
do not complete this section, your distributions will be automatically reinvested
into the Fund and additional units issued to you. Note: if your address is an
international address, you cannot reinvest your distributions and you must supply
Australian bank account details to us for payment of your distributions.
Name of bank or financial institution
Licensee address
Street no.
& name or
PO Box
Suburb
State
Postcode
Business phone number
Branch name
Business fax number
1300 559869
BSB number
Account number
Licensee email address
–
Account name
Adviser company name
5 INVESTOR COMMUNICATIONS
Adviser name
Would you like to receive all investor communications (including but not limited
to annual financial statements, notices of meeting, proxy forms, distribution
statements, annual tax statements and other investor correspondence)
electronically including by email notification and internet access?
No
Yes
Provide your email address in section 1.
Would you like to opt in to receive a copy of MPIF’s annual financial statements
each year (electronic or hard copy per above election)? If you do not complete
this election, you will not receive a copy of the annual financial statements. An
electronic copy is available from www.macquarie.com.au/propertyincomefund.
No
Yes
Adviser address
Street no.
& name or
PO Box
Suburb
State
Postcode
Business phone number
Business fax number
Adviser email address
6 DECLARATION AND SIGNATURE
This application contains information about investing in MPIF and which
should be read before applying for units.
I /We agree to be bound by the PDS (including any supplementary PDS), and
the constitution of MPIF in which I /we invest. I /We acknowledge that investments
in MPIF are not deposits with or other liabilities of Macquarie Bank Limited,
MDPML or any Macquarie Group entity, and are subject to investment risk,
including possible delays in repayment and loss of income or principal invested.
I /We further acknowledge that none of Macquarie Bank Limited, MDPML or any
Macquarie Group entity guarantees the performance of MPIF, nor do they guarantee
the repayment of capital from MPIF, or any particular rate of return.
I /We further acknowledge that I /we accept and agree to the information
set out in Section 8 ‘Investing in the Fund’.
I/We being the potential holders of units in Macquarie Property Income Fund hereby
appoint the adviser whose details appear in section 7 of this Application Form and
authorise the Manager to pay the adviser commission in accordance with section 7 of
this Application Form. I/We acknowledge that the Manager may supply my/our adviser
with information about my/our account unless I/we instruct the Manager not to do so.
If fee details are not completed, no commission will be paid
to an adviser/broker.
Have you agreed to take all or part of the commission?
If yes, select the percentage to be paid to you:
Date
SIGN HERE
⁄
%
up to a maximum of 4.4% (including GST)
of initial and additional investments
Trail
0.30
%
up to a maximum of 1.1% p.a.
(including GST)
I would like to receive confirmation of
my client’s investments and withdrawals.
Electronic
X
Hard copy
I would like to receive a copy of my
client’s annual tax statements.
Electronic
X
Hard copy
Sole director and sole secretary
Authorisation of applicant B or company officer
Date
SIGN HERE
Name
If a company officer, you must specify your corporate title.
Other
D D
⁄
M M
⁄
Y Y Y Y
Adviser stamp
Trustee
Other
Director
SIGN HERE
Authorised representative number
If a company officer, you must specify your corporate title.
Secretary
Trustee
⁄
⁄
No
0.00
Date
⁄
Name
Director
X
Upfront
Please read the product disclosure statement before signing this form
Note: company accounts usually require two signatories.
Authorisation of applicant A or company officer
Yes
Contact details
Please contact us directly through any of the methods
below regarding your investment:
Internet
www.macquarie.com.au/propertyincomefund
Fund enquiries
Phone:
1300 652 790 (local call cost)
(02) 8232 3333
Fax:
(02) 8232 6510
Email:
macquariedirectproperty@macquarie.com
Mail to:
Macquarie Direct Property
Management Limited
GPO Box 4294
Sydney NSW 1164
Deliver to:
Macquarie Direct Property
Management Limited
No. 1 Martin Place
Sydney NSW 2000
Registry enquiries
Phone:
1300 137 895
Fax:
(03) 9473 2140
Email:
macquarieca@computershare.com.au
Mail to:
Macquarie Property Income Fund
Computershare Fund Services Pty Limited
Locked Bag 4
A’Beckett Street
Melbourne VIC 3000
Custodian
Permanent Trustee Australia Limited
ABN 28 008 412 913
Level 4
35 Clarence Street
Sydney NSW 2000
For further information on the offer, you may also
contact your financial adviser or IDPS Operator.
Change of contact details, Application Forms
and withdrawals
For changes of address, bank account details,
TFN notification or other registry matters, please
contact the registry.
All Application Forms should be sent to
the registry.
www.macquarie.com.au /propertyincomefund