Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

HK Type 4 license through Ballingal Investment Advisors Ltd. ("BIA" or "BIAL")

BACKGROUND
I have 20+yrs experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies with most of that time spent managing money. 

4 years in fixed income macro, 8 years running internal hedge fund and 4yrs investment banking at Citi in Japan, 3 years running an Asia multi-strat portfolio at a hedge fund, 4+yrs as an independent special situations analyst.

Pan-Asia Catalysts/Events

Australia Banks - MQG Funding Cost, NPLs Far Worse, With Higher Rates, Longer

Macquarie Group Placement - Similar to Its 2019 Placement Which Did Well

Macquarie Group Placement - Small in Relative Terms but Seems Opportunistic

Quiddity Advisors

Event-Driven

The morning of 29 October pre-open, <a href="https://www.smartkarma.com/entities/macquarie-group-ltd" target="_blank" data-smartkarma-citation="entities:310:1" rel="noopener">Macquarie Group (MQG AU)</a> halted trading, reported H1 earnings (<a href="https://www.asx.com.au/asxpdf/20211029/pdf/4528z984zgfv9b.pdf" target="_blank" rel="noopener">results</a>, <a href="https://www.asx.com.au/asxpdf/20211029/pdf/4528z70j885sny.pdf" target="_blank" rel="noopener">presentation</a> on earnings and capital raise, a <a href="https://www.asx.com.au/asxpdf/20211029/pdf/452b4xst6354m1.pdf" target="_blank" rel="noopener">A$2.72 dividend</a> for record date 9 November) and then conducted a A$1.5bn institutional capital raise. The Group sold 7.7mm shares at A$194.00/share, a 1.9% discount to close after starting the bookbuild at a 4% discount, with shares sold settling on 3 November and eligible to receive the upcoming dividend. Existing institutional shareholders were entitled to participate up to a pro-rata total and 90% of the 7.7mm shares were placed with existing shareholders with the other 10% placed with new shareholders. As noted on Friday in the presentation, Macquarie's non-institutional shareholders will be entitled to participate in a Share Purchase Plan for up to A$30,000 each, with that offer opening on 8 November (i.e. NOT entitled to receive the dividend) and closing 26 November. The price will be the lower of the A$194.00 Placement Price less A$2.72/share of dividends and a price equivalent to 98% of the five day VWAP through the close of the SPP Period. This will be a no-brainer for existing holders (there are 173,000 holders as of the last Annual Report with 1,000 shares or fewer).This will have effects on index trackers.

The morning of 29 October pre-open, Macquarie Group (MQG AU) halted trading, reported H1 earnings (results, presentation on earnings and capital raise, a A$2.72 dividend for record date 9 November) and then conducted a A$1.5bn institutional capital raise. The Group sold 7.7mm shares at A$194.00/share, a 1.9% discount to close after starting the bookbuild at a 4% discount, with shares sold settling on 3 November and eligible to receive the upcoming dividend. Existing institutional shareholders were entitled to participate up to a pro-rata total and 90% of the 7.7mm shares were placed with existing shareholders with the other 10% placed with new shareholders. As noted on Friday in the presentation, Macquarie's non-institutional shareholders will be entitled to participate in a Share Purchase Plan for up to A$30,000 each, with that offer opening on 8 November (i.e. NOT entitled to receive the dividend) and closing 26 November. The price will be the lower of the A$194.00 Placement Price less A$2.72/share of dividends and a price equivalent to 98% of the five day VWAP through the close of the SPP Period. This will be a no-brainer for existing holders (there are 173,000 holders as of the last Annual Report with 1,000 shares or fewer).This will have effects on index trackers. 

Macquarie Placement - Index Effects Dispersed Over Time and Space