Hi mmcpq821,My point is before the mid 90s these trust acted...

Hi mmcpq821,

My point is before the mid 90s these trust acted like safe utilities with predictable earning and minimal leverage. These sort of vehicle were internally manage.

Then came innovative Macquarie model which will acquire assets like commercial property with cheap debt put that in a fund and float it on the open market and recoup there outlay for the next deal. The terms of these fund will be geared at around 60% and Macquarie bank (now group) will have the rights to manage it for 15 to 20 years. If they dont have the cashflow to pay distribution they will borrow debt how is this sustainable?

Management fees in term of the unit holders interest are worth more than the assets in my opinion, when these asset are revalued in a rising market they use this paper gain to borrow and creat cashflow. My point is now that these asset of decreasing in value gearing is rising the debt need to be serviced and management fees need to be paid.

Now I sell my management Rights?

Seem to be win win situation for the manager with the risk.

Please tell me mmcpq821 how has external manager added value to the long term holders of MOF

DYOR

All the best to holders