Macquarie funds beat benchmark

Macquarie Bank, Australia's biggest investment bank, will receive A$245 million ($267 million) in performance fees after two funds it manages beat benchmarks, boosting optimism that it will meet its record earnings forecast.

Fees from Macquarie Airports and Macquarie Communications Infrastructure Group are higher than the bank expected in November, the lender said yesterday.

Chief executive Allan Moss forecast on November 16 that fiscal 2005 earnings will beat last year's record A$494 million.

Macquarie Bank, the best performing Australian bank stock for the past two years, buys stakes in airports, toll roads and other infrastructure assets, which it bundles into funds for investors.

That's helped to more than double commission and fee income to A$1.65 billion since 2000.

"There's always a question-mark attached whether earnings forecasts are achievable, and Macquarie is now confirming they're delivering," said Angus Gluskie at White Funds Management in Sydney.

Macquarie Airports, the world's second-largest non-government owned airport operator, will pay A$189.9 million in performance fees for the six months ended December.

Macquarie Communications Infrastructure, which invests in television and radio transmission towers, will pay A$57.9 million.

Macquarie Airports beat its performance target by 38 per cent in the half, and Macquarie Communications outperformed its benchmark by 48.8 per cent.

Macquarie Bank stock closed yesterday 31Ac higher at A$46.94. The shares have gained 80 per cent in the past two years. The bank's profit rose 17 per cent to A$284 million in the six months ended September 30.

- BLOOMBERG