This may well be a contentious point…
Yesterday I received in the mail yet another prospectus and PDS on behalf of MFS Limited, and after having a close look through it, couldn’t help but notice the similarities between MFS and Macquarie Bank.
This time, MFS Living and Leisure Group (MLG) are raising $175 million. ‘What is it for?’ you might ask. Well, MFS are conducting this capital raising so that MLG can effectively acquire MFS’s aquarium and ski resorts businesses. This ‘offloading’ of assets from its balance sheets is exactly what Mac Bank is famous for.
Interestingly enough, the Macquarie bankers are the sole lead manager and underwriter.
Mac Bank has well over a dozen ASX listed property and equity funds, not to mention it also has many unlisted funds. I’m sure we can all name at least 3 or 4 of these. MFS (which has a market cap of $917 million compared with MBL’s $16,784 million) is also starting to make a name for itself, with 4 listed funds, including the recently successful float of HFA Holdings.
This brings us to fees. MLG will pay MFS an acquisition fee alone of $2.6 million. Down the track, MFS, like MBL, will continue to reap all sorts of fees from its listed funds, including base management, incentive and performance fees.
Apart from this offloading of assets into listed funds, MFS also manages a broad range of income, direct property and its ASX listed funds. MFS specialises in diversified funds management, structured finance and tourism and currently manages over $2.5 billion in funds across Australia and New Zealand.
The following is from MLG’s prospectus:
MLG will seek to combine its management’s expertise with MFS’s fund and asset management expertise, execution and financing capabilities. MFS’s deal flow, client relationships and expertise in identifying further investment opportunities are expected to be a key advantage to MLG.
Does this sound familiar??
Will MFS be the next ‘millionaire’s factory’? I’d like to think so! Any thoughts?
Please do further research and note that I hold shares in MFS and HFA.