Lead Manager

BABCOCK & BROWN PROSPECTUS
Everest Babcock & Brown Absolute Return Funds I and II
In 2003, Babcock & Brown formed a joint venture with Everest Capital Limited to launch a series of absolute
return funds (also known as hedge funds). $210 million was raised for Fund I which closed in October 2003, and
Fund II closed in June 2004 with $259 million in funds under management.The underlying funds include some
of the world’s most accomplished absolute return fund managers.
ALPHA
$3.5
OPTIMAL
$500
EVEREST BABCOCK
& BROWN ABSOLUTE
RETURN FUND
Funds Under Management ($bn) Funds Under Management ($m) Funds Under Management ($m)
$500
488
$3.0
3.0
$400
434
$400
$2.5
2.5
$2.0
$300
315
$300
$1.5
$200
$200
218
$1.0
$0.5
0.4
1.2
$100
106
127
$100
$0
$0
12/01 12/02 12/03 06/04 12/01 12/02 12/03 06/04
$0
12/03 06/04
Future growth
Expand investment activities in target sectors
Babcock & Brown continues to see attractive opportunities to expand its corporate investment activities within
the Australian market.With acquisitions like PrimeLife and AssetInsure, the Corporate Principal Investment
Group has already begun to take longer-term positions where Babcock & Brown believes significant value can be
built over a three to five year timeframe by growing businesses organically and/or through consolidation and
where there are other profit-generating opportunities or strategic benefits for the Group from the relationship.
The Corporate Principal Investment Group will also seek to increase the size of its investments to increase the
absolute size of its profits.
Develop co-operative initiatives with other Business Groups
The success of transactions such as the TAHL acquisition (see case study in Real Estate Section) highlights the
benefit of Group co-operation.The Corporate Principal Investment Group has worked successfully with the Real
Estate and Infrastructure and Project Finance Groups to develop and execute transactions in the past, and is
seeking to extend this co-operative model to the other Business Groups within Babcock & Brown.Working
more closely with the Structured Finance Group could, for instance, result in the development of financing
structures that provide Babcock & Brown with a funding advantage and hence a potential pricing advantage in
the acquisition of certain asset-intensive businesses.
Measured expansion into overseas markets
The Corporate Principal Investment Group’s activities have to date been focused on Australia. Primarily through
co-operative ventures with the other Business Groups, the Corporate Principal Investment Group has recently
begun to evaluate investments in other jurisdictions.
Funds management growth
The Corporate Principal Investment Group will continue to focus on developing its funds management business.
Babcock & Brown is currently working on a number of initiatives including a wholesale private equity fund.
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