Fee Pie Fo Some

More model behaviour by the Millionaires Factory

MAp defends $92m paid to Macquarie Bank

Macquarie Airports (MAp) faced tough questions from security holders at its annual general meeting about the $91 million in fees it paid backer Macquarie Bank last year.

MAp, which has investments in airports in Sydney, Rome, Copenhagen and elsewhere, paid Macquarie Bank a total of $54 million in base fees and $37 million in performance fees in 2005.

That was on top of the fees MAp paid to Macquarie Bank for financial advice on matter such as the refinancing of Sydney Airport.

However, [chief executive Kerrie] Mather declined to reveal the total fees paid to Macquarie Bank in 2005.

The fund's independent directors had also chosen to take their performance fees in securities so it didn't flow through as a cash expense to MAP investors, she added.

The Daily Telegraph adds to the reports,

THE MAp director whose job it is to monitor fees paid to Macquarie Bank has vowed to ditch his shares if investors "punt" the Millionaire Factory as manager of the $5 billion airports fund. Trevor Gerber made the admission to The Daily Telegraph yesterday after MAp's annual meeting, where the board was repeatedly questioned over $92 million in fees paid to MacBank.

[W]hen Mr Gerber was asked about whether it was possible to seek "expressions of interest" from MacBank rivals, he said the question displayed a "commercial naivety".

"We have no desire to certainly no reason to seek alternative bids because the performance has been exceptional," Mr Gerber said. Later he said investors were able to "punt" Macquarie as MAp's manager if they wanted to – it only required majority backing.

If this happened he would sell his stake. Mr Gerber, a former Westfield executive, owns 170,000 MAp shares worth about $560,000 at yesterday's closing price of $3.29, up 7c.

In defending Macquarie's performance, the board pointed to a strong internal rates of return and growing dividend payments.

However, the share price is no higher than it was in January 2005 – a fact that grates with many of MAp's 42,000 investors. Ms Mather said she was "equally disappointed" with MAp's share price performance.

Mr Moore-Wilton offered hope, saying he and the board believed "the market will correct itself in respect to the underlying value of Map shares in due course".

The Sydney Morning Herald had this take on events.

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