I had a look at what the Fund would look like if Macquarie...

I had a look at what the Fund would look like if Macquarie suddenly said we have had enough of this, we are are going to dump the entire US portfolio at fire sale prices.

Lets assume they flogged it quickly by slashing 20% off the recent asset valuations. Thats at a massive Cap Rate of around 8.7% (Valueation Cap Rate is 7%).

The effect of this would be to reduce total assets to $3.184 Billion against liabilities of $990 Million. The Fund would have a largely Australian asset & debt exposure with a NTA of around $2.2 Billion or 48 cents a unit.

Long term unit holders would howl but the Fund would have a toyal look through gearing of only 31% and would be de-risked. The unit price would rocket up.

Once you eliminate the debt and all of the US income you lose about 25% of Net Earning Per Unit. Not a bad result.

Those writing this fund off simply need to crunch the numbers. You can slash the guts out of the US portfolio to dump it and still end up with a very healthy largely Australian asset fund with moderate gearing and a very good distribution of say 2.1 - 2.2 cents per unit per annum (29%).

The question is whether Mcquarie would do anything so drastic to try and restore value short term.