Macquarie’s Shield make good a balance sheet blip

Macquarie Group’s first half results announcement has underlined the relatively modest balance sheet impact of Macquarie Investment Management reimbursement of investors on its wrap platform for the Shield Master Fund collapse.

The company’s agreement with the Australian Securities and Investments Commission (ASIC) rated the briefest of mentions in the half-year investor briefing but did note the logistics of the measure.

It said that on 25 September, ASIC announced that Macquarie Investment Management had undertaken to facilitate the payment of 100% of the net capital (around $321 million) invested by around 3,000 members in the Shield Master Funder through the Macquarie Wrap platform.

“This was achieved by making two payments,” the company said. “The first payment was for the purchase of the members’ Shield units at current fair value, transferring al rights, including future distributions, to Macquarie. The second was a goodwill payment to members, representing the difference between the first payment and the original net capital invested”.

More broadly, Macquarie announced a net profit after tax of $1.655 billion for the half-year ended 30 September noting it was up on the same period last year, but down 21% on the half year ended 31 March.

Macquarie Group managing director and chief executive, Shemara Wikramanayake said the improved underlying performance across the firm’s operating groups reflected the ongoing benefits of its diverse business mix.

The Board announced a first half ordinary dividend of $2.80 per share 35% franked.