Vendors fleece Macquarie’s cash box over European directories

Macquarie Bank may live with the moniker “millionaires factory”, but in this week’s purchase by Macquarie Capital Alliance Group and the bank of a controlling stake in Yellow Brick Road, it may be the vendors who have taught the bank a lesson in how private equity should be done. Macquarie and some other investors agreed to pay $3.1 billion to buy five central European telephone directory businesses from European private equity groups Veronis Suhler Stevenson Partners and 3i. Veronis and 3i generated a profit of just under 400 per cent from their three year old investment in the directories businesses. Macquarie Capital said the investment was expected to meet Macquarie Capital's targeted return on funds of 20 per cent.