Macquarie International Infrastructure Fund

[weijian]

The dissidents' responding as below:
http://prnewswire.netpr.pl/en/pr/228190/...mited-miif

The thing I find alarmingly glaring in the SGM is why LIM is even calling it in the first place. They asked for the increase in the number of directors and put up 3 of their cronies for director nomination, but where is the justification and the rationale?? Why should I vote for the resolutions??

I guess the reason they are NOT selling out is because as 'patient value investors' (hahaha..what a nice description), they may have seen the value in the fund and hence they have a profit-oriented cause to maximise and realize it.

In fact, I'm a little pissed by the actions of LIM. If they dun like the direction that MIIF is going, just pull yr money out. Why create all these unnecessary expenses?? All these are just eating up cash and for what?? I dun get it.

[Louhan]

If LIM finds that there's value in MIIF, why not they just give a reasonable cash offer to privatize MIIF?

The dissidents' responding as below:
http://prnewswire.netpr.pl/en/pr/228190/...mited-miif

The thing I find alarmingly glaring in the SGM is why LIM is even calling it in the first place. They asked for the increase in the number of directors and put up 3 of their cronies for director nomination, but where is the justification and the rationale?? Why should I vote for the resolutions??

I guess the reason they are NOT selling out is because as 'patient value investors' (hahaha..what a nice description), they may have seen the value in the fund and hence they have a profit-oriented cause to maximise and realize it.

In fact, I'm a little pissed by the actions of LIM. If they dun like the direction that MIIF is going, just pull yr money out. Why create all these unnecessary expenses?? All these are just eating up cash and for what?? I dun get it.

[mrEngineer]

Thanks for the article.

LIM Advisors and Metage Capital mentioned they represent instituitional investors and therefore i presume they have no interest or operational capability in taking the fund private as it will be difficult for them to exit or do fund redemption in the future.

In any case, this article itself may help MIIF to perform a re-rating already in the market if its get published in local newspapers. 24% of NAV.. haha. Congrats to those who bought it!

Not Vested.

[weijian]

hi tanjm,
Is this the review that you are talking about?
http://www.macquarie.com/dafiles/Interne...olders.pdf

Besides chairman Heng Meng Chiang who has ~4mil shares and hence has vested interests to see shareholder value maximised, i do share your sceptism that MIIF mgt has no incentive to do shareholder rational things as they need to protect their fees (it is lucractive, isn't it?)

As stated in its policy, it only intends to retain minimal cash at fund level for prudent sake. It has been almost 2 years since the fund level cash ballooned. Therefore i feel that the Board has lost the legitimacy to hold this disproportionate amount of cash at fund level. I do not believe it will be able to utilise the cash prudently and wisely in such low interest rate environment both now and the foreseeable future.

I believe MIIF has done a "strategic review" once before and decided to ...... do nothing.

MIIF management has no incentive to do stakeholder rational things like returning lump sum cash to investors etc. They have fees to protect.

[money]

A significant portion of the earnings of management comes from the share price. If the weighted average of the share price is higher, then they are paid more.

Hahaha, tell me why will they do a lump sum payout of the surplus cash when we all know that right after the payout, the share price will drop !!!

Perhaps, whether MIIF is really undervalued or not, they will most likely do a sharebuyback becos it has an effect of supporting the share price and therefore lead to more salary for management... I dislike companies whose interests are not aligned with shareholders and MIIF is definitely one such company. The same goes for FSLT, rickmers, where management enjoys using cashflow to pay bankers than to pay shareholders..

Anyway, at the current price of $0.56, i dont think MIIF is undervalued considering the look-through debt of its underlying investments. Management keeps emphasizing that debt is non-recourse, but so what, the free cashflow will eventually be impacted due to the non-recourse debt and your current dividend yield of 10% today may be easily halved. If i were still a shareholder today, i would sell

[lonewolf]

I read the open letter from LIM and I dun buy it. Why is discount to NAV such a big deal anyway? I dun think its should be the 'be all that ends all' factor in deciding on the merits of investing in the company.

As a professional fund manager, if you see trouble with MIIF, why do you continue to stay vested in the company and not divested your funds away??

However, I am beginning to concur with the view of forumer 'money' that management interest is not aligned to shareholders. I'm sitting on a nice chunk of capital gains and may decide just to exit and be done with all the drama mama.

[Louhan]

NAV is on paper only. Only if the assets can be sold at the NAV price, then it become realized value to the shareholders.

I read the open letter from LIM and I dun buy it. Why is discount to NAV such a big deal anyway? I dun think its should be the 'be all that ends all' factor in deciding on the merits of investing in the company.

As a professional fund manager, if you see trouble with MIIF, why do you continue to stay vested in the company and not divested your funds away??

However, I am beginning to concur with the view of forumer 'money' that management interest is not aligned to shareholders. I'm sitting on a nice chunk of capital gains and may decide just to exit and be done with all the drama mama.

[Drizzt]

I read the open letter from LIM and I dun buy it. Why is discount to NAV such a big deal anyway? I dun think its should be the 'be all that ends all' factor in deciding on the merits of investing in the company.

As a professional fund manager, if you see trouble with MIIF, why do you continue to stay vested in the company and not divested your funds away??

However, I am beginning to concur with the view of forumer 'money' that management interest is not aligned to shareholders. I'm sitting on a nice chunk of capital gains and may decide just to exit and be done with all the drama mama.

should know alot of ipo folks are still suffering from this one. they have 7 years to prove their management. they have failed.

[valuenewb]

I think the MIIF board is too quick to reject the proposed resolutions.

Even if they do not like the proposed directors, there is no harm to consider other candidates, i.e accept resolution 1.

Requisitionists have 1 goal, that is to maximise the value of their investment in MIIF. They seem not to be short term raiders so I give it to them that they have been patient but the board has not delivered.

With Macquarie and LIM/Metage each having 10%, it would be entirely up to Asset Value Investors to determine the fate. Liquidation is a possibility of course but that's the last resort. What has the board done so far? Approved share buybacks. Some may say that it helps to narrow the discount but in this case, I think the manager is motivated by increased compensation as cash on the books reduces their fees. Apart from that, they have increased their stake in TBC. Check out who owns the other equity interest of TBC and you won't be impressed with how much work the board has done.

LIM eating up cash? Creating unneccessary expenses? What about the board who does nothing? What about the manager who earns your fees without having to work?

LIM/Metage's timing may be bad given that the strategic review has not been concluded. It may be just the trigger for them as once the board makes a decision on the strategic review, the door will be shut on all shareholders "to give board the time to deliver". It's another two-three years before the board can be assessed for their performance. Looking back, I would say that they already have had their chance. And didn't deliver.

Depending on how keen LIM/Metage are, I would say that making an offer is not out of their reach but they would prefer not to do so as it is not their MO. In fact, calling for EGM/SGM is already not their usual MO. They must have been forced by the board to do so. For those who say they can vote with their feet, I think that's a sad statement to make. If you have something that is more valuable but the people sitting on it are bullying you into selling it at a lower price, would you do so? Plus with 10%, there isnt enough depth in the market to absorb the 10%. If they start paring their stake, they lose the ability to call for EGMs once they fall below 10%.

And the talk about extra fees is absurb. If the AC so determines that the company should pay this much for their board, then if the board can't deliver and they need additional directors to do their job, then split the fees! The current directors give half of their fees to the new directors and let the new blood do their work. Why is there talk of doubling the fees for the board? It's not fixed.

[money]

Liquidation will never happen because someone will lose management fees.

There are very few money managers who will liquidate their funds. I would think those who voluntary do so during good times tend to be honest with strong integrity. buffett liquidated his partnership during 1969 when his fund had superb returns during that period. He felt that he couldnt find any more bargins, he was independently wealthy and didnt need those management fees. Most other funds need management fees very badly.

I used to be a shareholder starting jan 2009, sold everything in 2010, was very uncomfortable with the underlying debt of MIIF's investments (except perhaps Tbc).

If i were still a shareholder, i may vote to bring in the new directors. Perhaps the new directors would push for liquidation, sell off businesses with bullet debts due soon, etc, wouldnt that be a positive development?