RARE Infrastructure Limited

Treasury Group Adds “RARE Infrastructure” to its Portfolio

ASX Announcement

Treasury Group Adds Specialist Global Infrastructure Fund “RARE Infrastructure” to its Portfolio

Treasury Group Limited (TRG) is pleased to announce the establishment of a new funds management business with Richard Elmslie and Nick Langley. The new boutique, to be known as RARE Infrastructure, will specialise in global infrastructure and utility investments. TRG now has three international boutique fund managers, all high calibre businesses with a specialist focus. The initiative is consistent with TRG’s strategy of building a portfolio of “best of breed” boutique managers. TRG seeks to establish businesses that deliver returns from managers who represent a diverse range of asset classes within the funds management industry both in Australia and internationally. In response to the rapid development of the listed infrastructure and utilities sector over the past five years, TRG has been actively seeking new business opportunities with a specialised infrastructure focus.

RARE Investment Philosophy
RARE Infrastructure believes that the active management of listed utility and infrastructure assets provides the opportunity to achieve both superior medium to long term returns and attractive risk return characteristics. RARE Infrastructure will adopt a bottom up, value approach to assessing securities. After detailed quantitative and qualitative analysis, a portfolio of 30-60 stocks will be selected from a universe of more than 40,000 global listed securities.

Business Objectives
RARE Infrastructure’s primary business objective is to capitalise on the development of infrastructure and utility securities as a separate asset class. As a direct outcome, it aims to provide investors with superior Risk Adjusted Returns on Equity (RARE) by delivering long term stable returns that are expected to have a high income component.

RARE Infrastructure believes there is no shortage of investment opportunities, with the market capitalisation of its targeted assets exceeding US$1 trillion as at June 2006. As well, RARE Infrastructure anticipates significant new issuances to
occur globally over the next decade, as governments continue to privatise utilities and renew existing infrastructure. TRG’s Chairman Mr Mike Fitzpatrick, who is no stranger to infrastructure, said, “TRG has brought to market an independent team which will be managing portfolios in one of the fastest growing asset classes in the world. We are particularly pleased to be associated with individuals whose depth of experience in this market is second to none”.

The RARE Team
Richard Elmslie and Nick Langley head the RARE Infrastructure team and, between them, have more than 24 years of experience in infrastructure. They worked together previously at ABN AMRO and in the course of their careers have focused on the full spectrum of infrastructure including gas, electricity and water utilities as well as communications, rail, road and airport infrastructure.

Richard has worked in global infrastructure and utilities for 16 years having recently held senior roles at UBS Investment Bank (2000-2004), most recently as Head of Power and joint Head of Infrastructure. Nick has worked in infrastructure and utilities for eight years, having gained that experience as a member of both ABN AMRO and AMP Capital infrastructure teams. He was most recently the CFO of the ASX listed trust DUET, that was managed jointly by AMP Capital and Macquarie Bank.

RARE’s research team of three senior investment analysts is headed by George Raftopulos, the senior portfolio manager, who has 23 years experience in funds management and equities research.
Sarah Shaw has 7 years experience with Dresdner Kleinwort Wasserstein based in London, covering global telco utilities.
Rod Chisholm has 6 years experience with HSBC in London also covering globalutilities.
David Maywald, a qualified CFA, and ex BT Funds Management, has extensive infrastructure research as well as currency strategy and dealing experience.

David Cooper, Managing Director of TRG, also expressed his enthusiasm for the future prospects of RARE Infrastructure: “Richard and Nick have worked together before and they have strong complementary experience gained both domestically and in the international arena. I believe this team’s capabilities are unrivalled by any perceived competitor in the Australian marketplace”.

TRG Support for RARE
Treasury Group Investment Services Limited (TRG’s wholly-owned subsidiary) will support RARE Infrastructure with its back office business needs. Treasury Group Investment Services Limited has a proven track record in both the establishment and ongoing support of the back-office requirements of funds management businesses.

The cost to TRG of establishing the RARE Infrastructure business has been capitalised. RARE Infrastructure expects to build its client base over the next twelve months with discussions already underway both locally and offshore. These endeavours will be greatly assisted by TRG’s strengthened distribution capabilities.

TRG has issued the senior members of the investment team 150,000 options in aggregate, to subscribe for shares in TRG. The options will be issued for no cash consideration and have an exercise price of $16 per share. Full details of the issue of options are included in the appendix 3B to be lodged separately.

RARE Infrastructure will officially launch in July 2006 when it receives funds for its first, already committed, investment management mandate. RARE also intends to establish a managed investment scheme which it expects will be open
to investors later this calendar year.

Shareholder approval is not required and will not be sought in relation to any aspect of this transaction.

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