VOLition - Final - PDS - MQ Series - Macquarie · PDF file• Series C – MQ Equity Income; and • Series D – MQ Geared Equity Income. This is the first time Units in the above

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VOLition Fund ARSN 136 856 383

Series A, B, C and D

PRODUCT DISCLOSURE STATEMENT

Responsible Entity of the VOLition Fund – Macquarie Alternative Assets Management Limited

ABN 30 103 237 181

AFSL 225758

28 MAY 2009

VOLition Fund ARSN 136 856 383

Series A, B, C and D

PRODUCT DISCLOSURE STATEMENT =

Responsible Entity of the VOLition Fund – Macquarie Alternative Assets Management Limited

ABN 30 103 237 181

AFSL 225758

3 June 2009

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IMPORTANT INFORMATIONThis Product Disclosure Statement (“PDS”) is dated 3 June 2009 and is issued by Macquarie Alternative Assets Management Limited ABN 30 103 237 181 (“the Responsible Entity”) as responsible entity of VOLition Fund ARSN 136 856 383 (“VOLition Fund”). The Responsible Entity holds Australian Financial Services Licence No. 225758. The Responsible Entity’s contact details appear in the Directory at the back of this PDS.

Glossary

A glossary of terms used in this PDS appears in Section 10 of this PDS.

The Offer

This PDS invites you to apply for Units in the VOLition Fund. This invitation is called the Offer. There are several Series of Units available under this PDS referred to in Section 1 of this PDS. The VOLition Fund is registered as a managed investment scheme under the Corporations Act.

Please read this PDS and do not invest unless you understand the VOLition Fund. This PDS does not take into account any particular investment needs, objectives or financial or taxation circumstances that may be relevant to you. Before making a decision to invest in the VOLition Fund, you should read this PDS, and consider, in conjunction with your financial adviser, whether an investment in the VOLition Fund is appropriate in view of your particular investment needs, objectives and financial and taxation circumstances.

Not deposits with Macquarie

Investments in the VOLition Fund are not deposits with, or liabilities of, Macquarie Bank Limited (“MBL”), the Responsible Entity or any other Macquarie Group company, and are subject to investment risk, including possible delays in repayment and loss of income or capital invested. None of MBL, the Responsible Entity or any other Macquarie Group company guarantees any particular rate of return, or the performance of, the VOLition Fund, nor do any of them guarantee the repayment of capital from the VOLition Fund.

Index & Index sponsor

Standard & Poors is the sponsor of the S&P/ASX 200 index (“Index”). S&P and ASX used in the term S&P/ASX 200 index are trade marks of the McGraw-Hill Companies Inc (McGraw Hill) and ASX Limited respectively. The VOLition Fund is not sponsored, endorsed, sold or promoted by Standard and Poor’s, ASX Limited or McGraw Hill (the “S&P parties”) and none of them make any representation (express or implied) about the investment or assumes any liability in respect of the VOLition Fund or its administration, the advisability of investing in securities generally or in the VOLition Fund particularly. None of the S&P parties or any other entity guarantees the accuracy and/or the completeness of the Index or any other S&P indices or any data included therein and they shall have no liability for any errors, omissions, or interruptions therein. No S&P party or any other entity makes any warranty or condition, express or implied, as to results to be obtained by investors, or any other person or entity from the use of the Index or any other S&P indices or any data included therein. No S&P party or any other entity makes any express or implied warranties or conditions, and each of them expressly disclaims all warranties or conditions of merchantability or fitness for a particular purpose or use with respect to the Index or any other S&P indices or any data included therein. Without limiting any of the foregoing, in no event shall any S&P party or any other entity have any liability for any special, punitive, indirect, or consequential damages (including lost profits) resulting from the use of the Index or any other S&P index or any data included therein, even if notified of the possibility of such damages.

Changes and updates to PDS

Information in this PDS may change from time to time. The Responsible Entity may provide updated information on the VOLition Fund website at www.macquarie.com.au/volition.

A paper copy of the updated information is also available upon request and free of charge by contacting the Responsible Entity. In addition, the Responsible Entity may be required to issue a supplementary PDS as a result of certain changes, in particular where changes are materially adverse from the point of view of a reasonable person deciding as a retail investor whether to invest in the VOLition Fund. In that case a supplementary PDS will be made available with this PDS.

Paper and electronic form

This PDS is available in paper form from the Responsible Entity and in electronic form on the VOLition Fund website at www.macquarie.com.au/volition. Investors who wish to invest in Units in the VOLition Fund must complete and return an Application Form attached to this PDS or print, complete and return a copy of the Application Form accompanying this PDS on the VOLition Fund website. Units will only be issued upon receipt of an Application Form which was attached to this PDS or which was printed from the VOLition Fund website.

Selling restrictions

You can only invest in a VOLition Fund Series if you are an Eligible Applicant for that Series. You are only an Eligible Applicant for a Series if you hold and are switching from a Macquarie Group product listed for that Series in Section 2.2 of this PDS. Once you have invested, there is no right to switch between Series.

The Offer is only available to Eligible Applicants who receive this PDS, whether in paper or electronic form, in Australia. Investors who receive this PDS in electronic form are entitled to obtain a paper copy of this document (including the Application Form) free of charge by calling the Responsible Entity on 1800 080 033.

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The distribution of this PDS in jurisdictions outside Australia may be restricted by law and therefore persons into whose possession this document comes should inform themselves of, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of those laws.

This PDS does not constitute an offer of securities in any jurisdiction, or by any person to whom, it would be unlawful to make such an offer.

Risks in this PDS

All investments involve a degree of risk. Please ensure that you consider the risks of investment in the VOLition Fund including those that we have referred to in Section 5 of this PDS.

As well as the risks of this particular product, you should also consider how an investment in this product fits into your overall portfolio. Diversification of your investment portfolio can be used as part of your overall portfolio risk management to limit your exposure to failure or underperformance of any one investment, manager or class.

Enquiries and complaints

For information regarding enquiries and complaints, see Section 9.4 of this PDS.

General

Other than MAAML, none of Macquarie Group Limited ABN 94 122 169 279, Macquarie Bank Limited ABN 46 008 583 542 or any other member of the Macquarie Group of companies is the issuer of this PDS or takes any responsibility for the contents of this PDS except for the statements made by or attributed to them.

Unless otherwise stated, all references to dollars or $ in this PDS are to Australian dollars.

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Key dates Applications Open 3 June 2009

Applications Close 30 June 2009

Issue Date (date on which Units are issued) 14 August 2009

Expected expiry of Cooling Off Period 4 September 2009

Maturity See “Term & Maturity Dates” in section 1 of this PDS.

These dates are indicative only. The Responsible Entity reserves the right to vary these dates for the Offer without prior notice. Any changes will be notified on the VOLition Fund website at www.macquarie.com.au/volition.

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Table of Contents NK KEY FEATURESKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKK S

OK HOW THE VOLITION FUND WORKS KKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKNQ

PK INVESTING IN THE VOLITION FUND KKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKNU

QK THE INDEX CONTRACTS KKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKOO

RK RISKSKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKOT

SK FEES AND OTHER COSTS KKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKPN

TK TAXATIONKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKPR

UK REPORTING KKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKPU

VK ADDITIONAL INFORMATIONKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKPV

NMK GLOSSARY KKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKQN

APPENDIX AKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKQP

APPENDIX B KKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKRM

NNK HOW TO APPLY KKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKRO

APPLICATION FORM========

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NK Key Features This section of the PDS contains a description of some of the key features of the VOLition Fund and refers to other Sections of this PDS where you can find further information. You should read this PDS in full before deciding whether to invest in any Series of the VOLition Fund.

Topic Summary More Information

Overview The Volition Fund provides you with the opportunity to gain exposure to the S&P/ASX 200 Index and Cash Investments.

Your exposure to the gains and losses of the S&P/ASX 200 Index (the “Index”) will vary daily depending on the volatility of the Index over the previous 60 ASX trading days. The higher the level of volatility, the lower your daily exposure will be. Conversely the lower the level of volatility, the higher your daily exposure will be. Exposure could be as low as 0% and as high 150%.

You could potentially have low exposure to any gains of the Index, and high exposure to any losses of the Index. At Maturity, you will receive any returns that are above a certain threshold.

The Offer You are invited to apply for Units in the Volition Fund.

Units in the VOLition Fund are issued in classes. Each class is called a Series. The particular Series you are eligible to invest in under the Offer will depend on whether you hold the Macquarie Group product specified for the Series as set out under “Only Eligible Applicants can Apply” below. The following Series are available under this Offer:

• Series A – MQ Multi – S1;

• Series B – MQ Multi – S2;

• Series C – MQ Equity Income; and

• Series D – MQ Geared Equity Income.

This is the first time Units in the above Series have been Offered.

The Issue Price for each Unit under this Offer is $1.00. Any subsequent issues (for instance on reinvestment of the VOLition Fund distributions) will be made at an Issue Price that is based on Net Asset Value of the Series applied for and any transaction costs.

The Responsible Entity of the VOLition Fund is Macquarie Alternative Assets Management Limited (the Responsible Entity). It operates the VOLition Fund.

Please note that when you hold Units in a particular Series, there is no right to switch from that Series to a different Series.

Sections 2 and 3, Appendix A.1

Minimum application amounts

$10,000 is the minimum amount that you can invest in any particular Series when you apply under this PDS.

The Responsible Entity reserves the right to lower the minimum application amount.

Section 3.7

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Only Eligible Applicants can Apply

You are invited to apply for Units in the VOLition Fund if you are an Eligible Applicant. Please check whether you are an Eligible Applicant before you apply for a Series and complete the Application Form attached to, or accompanying, this PDS.

To be an Eligible Applicant for a Series you must hold and be switching from the Macquarie Group product that is specified for that Series in the table below (please note that none of the units referred to in the right hand column are currently available to be applied for from their issuer, as a result you must already hold those units):

Series Eligible Applicant product

Series A – MQ Multi – S1 Series 1 units in MQ Multi-Strategy Fund - Capital Protected ARSN 115 880 352

Series B – MQ Multi – S2 Series 2 units in MQ Multi-Strategy Fund - Capital Protected ARSN 115 880 352

Series C – MQ Equity Income MQ Equity Enhanced Income Fund ARSN 119 029 186

Series D – MQ Geared Equity Income

MQ Geared Equity Income Fund ARSN 124 648 504

Please note that even if you are an Eligible Applicant, the Responsible Entity can reject or accept any Applications (in whole or in part) for any Series without giving any reason.

If your Application is not accepted then your Application monies for the Series will be returned without interest (and any interest will be retained by MAAML).

How the VOLition Fund Works – Series Pools

The VOLition Fund is one trust. Units in the VOLition Fund are issued in Series.

The assets and liabilities of the VOLition Fund are allocated by the Responsible Entity into Pools. Each Series of Units is referable to a particular Pool for its Issue Price, Redemption Price, distribution and other payment entitlements.

The assets of the VOLition Fund acquired with the proceeds from the issue of Units for each Series will be allocated to the Pool for that Series. Fees, expenses and liabilities payable from the VOLition Fund are allocated among the Series Pools according to the Units, assets and liabilities to which they relate, along with a portion of general fees and expenses of the VOLition Fund. Where fees and expenses relate to more than one Series, they will be allocated among the Pools to which they relate.

Section 2

The Investments

Following the issue of Units in a Series under this PDS, the Responsible Entity will invest the amount raised for that Series so that the Series Pool contains:

• Cash Investments; and

• an Index Contract.

Sections 1, 2.4, 2.5 and 4

Cash Investments

The initial “Cash Investments” will be unsecured notes acquired by the Responsible Entity from Macquarie Group Limited under its Debt Instrument Programme. However the Cash Investments may from time to time also include notes, bonds, fixed term deposits or other like investments.

See sections 5.3 and 9.1.2 of this PDS for information on Macquarie Group Limited.

Sections 2.4, 5.3, 9.1.2 and Appendix A.2

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The unsecured notes are not deposits with Macquarie Bank Limited. Macquarie Group Limited is not a bank or authorised deposit taking institution and there is no form of guarantee associated with the notes, Government or otherwise.

The Cash Investments for a Series are made with the aim that, by Maturity, they will grow to a proportion (called the “Series Percentage”) of the Issue Price of the Units in that Series issued under this PDS (that are still on issue at Maturity). This is the “Protected Value” of an Investor’s investment in the VOLition Fund.

The indicative* Series Percentage for each Series is:

Series Indicative* Series Percentage at Maturity as a percentage of Issue Price

Series A – MQ Multi – S1 111%

Series B – MQ Multi – S2 116%

Series C – MQ Equity Income 108%

Series D – MQ Geared Equity Income 122%

There is no assurance that this aim will be achieved and if you are permitted to withdraw your investment in a Series before its Maturity, the amount you receive on withdrawal of your investment may be less than the amount that you initially invested in the Series.

20% of the unsecured notes (by face value) issued by MGL and allocated to each Pool will be redeemable at the Responsible Entity’s election. The balance will not be redeemable until Maturity.

* The Series Percentage for a Series will be set by the close of business on the business day prior to the Issue Date for the Series. Once set it will be available on the Fund website at www.macquarie.com.au/volition.

Index Contract An Index Contract will be entered into to provide exposure for each Series to the S&P/ASX 200 index (ASX Code: XJO and Bloomberg Ticker: AS51: IND)* (“Index”). The extent to which the Index Contract participates in the gains or losses of the Index each day – referred to as the “Participation Rate” - will depend on the volatility of the Index over the preceding 60 ASX trading days (“Volatility”).

Depending on the level of Volatility:

• the Participation Rate could be as low as 0% - the higher the level of Volatility, the lower the participation; and

• the Participation Rate could be up to 150% - the lower the level of Volatility, the higher the participation.

*The index sponsor has not participated in the preparation of this PDS. See the inside front cover of this PDS.

Sections 2.5 and 4

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Value of Index Contract

At Maturity

The value of the Index Contract at Maturity depends on the daily gains or losses of the Index and the level of participation of the Index Contract in those daily gains or losses.

At the end of the first day of the Index Contract, the percentage gain or loss of the Index on that day is multiplied by the Participation Rate for that day. This “adjusted” percentage gain or loss is then added to or subtracted from the starting level of the Index to create an index referred to as the “Adjusted Index”.

Each subsequent day until the Observation Date (which is approximately 10 business days before Maturity), the “adjusted” percentage gain or loss of the Index for that day is determined and added to or subtracted from the Adjusted Index level from the previous day.

Accordingly, the Adjusted Index changes each day until the Observation Date.

Example

Assume on Day 1, the volatility of the Index over the preceding 60 ASX trading days is 18% and the Index level at the start of that day is 1,000. Based on indicative Participation Rates, this means that the Participation Rate for Day 1 would be 100%. If the Index gains 2%, the “adjusted” gain on Day 1 would also be equal to 2% (being 100% x 2%). The Adjusted Index would therefore become 1,020.

On Day 2, assume that the volatility of the Index over the preceding 60 ASX trading days is again 18%, which means that the indicative Participation Rate for Day 2 would be 100%. However on Day 2, the Index decreases by 3%. This means that the “adjusted” loss is also 3%. Accordingly, on Day 2, the Adjusted Index falls by 3% from 1,020 to become 989.4.

Only if the final Adjusted Index at Maturity is greater than the Threshold for the Series, will the Responsible Entity then be entitled to receive a Deliverable from the Contract Counterparty. There can be no certainty that this will occur.

The Index Contract value (if any) is only deliverable by the Contract Counterparty on or about Maturity.

Before Maturity

Before Maturity, the value of the Index Contract will be its market value (which may not reflect the Adjusted Index level and Protected Value of relevant Units still in issue at that time). You should note that, whether before, after or at Maturity, the value of the Index Contract could be nil, even if the Index level has risen since the Index Contract commenced. This may for example be as a result of the increase in the Adjusted Index not exceeding the Threshold, Participation Rates being low or nil (due to high volatility) during days when the Index has made a gain, or Participation Rates being high (due to low volatility) magnifying the losses on the Index.

For examples of how the value of the Index Contract at Maturity is calculated, please see Section 4 of this PDS.

Section 4.5

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Threshold The Threshold for a Series is a fixed percentage of the starting Index level. The Adjusted Index must rise above the Threshold before a gain is deliverable at Maturity. The Threshold will be determined before the Index Contract commences and is then notified on the VOLition Fund website at www.macquarie.com.au/volition. The Threshold will be at least 100% of the starting Index level and is anticipated to be up to 115% (but may be higher).

Section 2.5

Deliverables Any amount to be delivered will be calculated as the difference between the final Adjusted Index and the Threshold, multiplied by the Protected Value for that Series.

If, at Maturity, a Deliverable is to be provided, such a Deliverable can be provided in either:

• cash; or

• ASX listed Deliverable Securities.

The Deliverable Securities will be ordinary fully paid ASX listed shares in the largest weighted entity by market capitalisation that is included in the Index on the Observation Date.

Sections 2.5 and 4.5

Counterparties The Responsible Entity enters into arrangements with other entities. The main arrangements relate to the investments made.

Macquarie Group Limited has agreed to issue the unsecured notes to be acquired by the Responsible Entity as the initial Cash Investments.

The Responsible Entity has not yet entered into the Index Contracts but has progressed negotiations and intends to enter into Index Contracts with a Contract Counterparty that is rated no less than A- by S&P at the time that the contract is entered into.

There is no assurance that the credit worthiness or credit rating of any party will not change after arrangements have been entered into.

No company in the Macquarie Group guarantees any particular return from the VOLition Fund, or the performance of the VOLition Fund, the Responsible Entity, Macquarie Group Limited, any Contract Counterparty or any other entity with which the Responsible Entity may enter into any contracts or arrangements.

Section 5.3 and 5.5

Term and Maturity Dates

Each Series has a specified Maturity as follows:

Series Maturity

Series A – MQ Multi – S1 1 June 2012

Series B – MQ Multi – S2 3 June 2013

Series C – MQ Equity Income 3 June 2013

Series D – MQ Geared Equity Income 2 June 2014

Maturity is not the time at which the Series ends or the VOLition Fund terminates.

Section 3.4

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Maturity for a Series has significance for 3 main reasons:

• Maturity is the time by which the Responsible Entity aims to have the Cash Investments for the Series grow to a size that at least equals the Protected Value of the amount that the Investor initially invested in the Series.

• Maturity is also the time around which any Deliverable is to be provided under the Index Contract for the Series.

• By lodging a Maturity Redemption Request at least six weeks before Maturity of the Series, subject to the liquidity of the VOLition Fund and the Series, you can have your investment in the Series redeemed on or about Maturity. No withdrawal fee is payable for such redemptions.

Following Maturity there are also changes in fees for each Series that you should note (please see section 6 of this PDS).

Withdrawals & Redemption

There is no right to withdraw from a Series except at Maturity. Whether or not you can redeem your investment in a Series is at the discretion of the Responsible Entity other than if requested for Maturity under a Maturity Redemption Request.

In the event that you are permitted to redeem your investment the redemption may not be effected for up to 6 months after the request was made. For redemptions made prior to or after Maturity, there is a greater risk than there is at Maturity that your investment may be worth less than the Protected Value of your initial investment in the VOLition Fund.

If you want to have your Units in a Series redeemed at the Series’ Maturity you can provide a Maturity Redemption Request to the Responsible Entity. The request must be received by the Responsible Entity at least six weeks before the Maturity of the Series.

Your Units will then be redeemed on Maturity* for their Redemption Price which is calculated based on the Net Asset Value of the Series less any transaction costs.

* Payment will be made as soon as reasonably practicable (and no later than 2 months) after redemption occurs.

Section 3.3

Distributions The Responsible Entity will distribute, at a minimum, all of the taxable income of the VOLition Fund at the end of each Financial Year (to the extent that it has not been previously distributed by inclusion in proceeds paid on any redemptions).

Distributions (including distributions on redemption) for a Series will, at a minimum, be equal to the taxable income for the Series (calculated as if the Series were a separate trust) as reduced by a share of any excess tax deductions that arise in any other Series.

However, until a Series reaches its Maturity the distributions that relate to the Series must be reinvested in acquiring further Units in that Series.

The reinvestment of distributions will mean that any tax payable on those distributions will have to be paid from your other sources.

Sections 3.6

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Key Risks Like many other investment opportunities there are a number of risks that may affect the value of your investment. Some key risks of an investment in the VOLition Fund are:

• Index / Market risk: your investment will be adversely affected if the Index performs poorly, including as a result of any increase in equity market uncertainty. High levels of volatility (such as those experienced in equity markets as a result of the global economic crisis) increase this risk.

• Variable participation risk: Exposure to the Index may be substantially or totally reduced due to high volatility. This may occur even when the value of the Index increases. Conversely, exposure to the Index may be high even when the value of the Index is falling. Further, because the level of participation in the Index performance is based on the volatility of the Index over the previous 60 trading days, there can be a lag before even dramatic changes in daily volatility affect the level of participation, so there may be continued higher exposure in periods of large Index falls or low participation in periods of steady Index gains. Due to recent high levels of volatility in equity markets, your exposure to the index at the commencement of the Index Contract is likely to be less than 100%.

• Counterparty risk: the value of your investment depends on the ability of the relevant Counterparties (including Macquarie Group Limited and the Contract Counterparty) to perform their obligations. The key consequences of a Counterparty not performing their obligations are:

• Macquarie Group Limited: the Cash Investments may not equal the Protected Value at Maturity. Prior to Maturity the value of the Cash Investments may be substantially less than the Protected Value (and could be worth nothing). Note that the initial Cash Investments are notes issued by Macquarie Group Limited, they are not deposits with Macquarie Bank Limited, nor is there any form of guarantee associated with the Cash Investments, Government or otherwise.

• Contract Counterparty: the amount of Deliverable under the Index Contract may not be able to be realised, which may mean you do not receive any return.

• Redemption/liquidity risk: There is no right to withdraw from the VOLition Fund except at Maturity. Your Units will have limited liquidity so you may not be able to realise your investment when you want to. In particular, the terms of the initial Cash Investments for each Series are likely to limit the amount of the redemptions as only 20% of the notes acquired as Cash Investments for each Series are redeemable. In addition, the amount that you receive on redemption may be less than your initial investment in the Series.

• Holding after Maturity: For Investors who continue to hold Units after Maturity of the Series, further Index Contracts are not intended to be entered into and the Deliverable or assets in the Series Pool will not be actively managed and may fall in value (including below the amount of your initial investment in the Series).

• One trust: as the VOLition Fund is one trust, the Series are not insulated from net risks and liabilities of the VOLition Fund overall. Liabilities of the VOLition Fund are allocated between Series Pools and affect the returns of Units.

Section 5

• Distributions reinvested: All income distributions are intended to be reinvested, so any tax payable on the distributions will have to be paid from your other funds.

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Key Risks (continued)

Your investment is subject to additional risks. Accordingly, before investing in the VOLition Fund you should consider carefully the risks that may affect the financial performance of the investment, including those outlined in Section 5 of this PDS.

Tax Distributions from the VOLition Fund are likely to include assessable income even though the Responsible Entity requires these distributions to be reinvested. You will be required to pay tax on this assessable income from your own sources.

The Responsible Entity will provide you with an annual tax report which details the tax consequences for your Units.

Section 7

Fees and Expenses

Fees and expenses (including management fees and withdrawal fees) apply to your investment in the VOLition Fund.

Section 6

Commission The Responsible Entity will pay trailing commissions of 0.30% per annum (GST inclusive net of RITC) of the Cash Investments to your financial adviser in respect of your investment. The Responsible Entity will also pay out of its own funds an upfront amount to an adviser appointed as the lead distributor of up to $450,000.

Section 6.2

How Complaints are dealt with

The Responsible Entity has a complaints handling and disputes resolution process for Investors.

Section 9.4

Cooling Off

There is a Cooling Off Period during which time you may request cancellation of your investment in a Series.

The period is 14 days commencing on the earlier of the date the issue of Units is confirmed to you and the end of the fifth business day after the date of issue of your Units. After that time, you can only withdraw by any permitted redemption of your Units.

Section 3.8

Further information

Please read this PDS and if you have any questions, either before or after investing, please contact the Responsible Entity. Its contact details are in the Directory at the back of this PDS.

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OK How the VOLition Fund Works 2.1. Series and Pools

The VOLition Fund is a new trust that has not previously been offered. There are several classes of Units in the VOLition Fund called Series. This PDS invites Eligible Applicants to apply for Units in one or more Series.

The Responsible Entity allocates a separate pool of the VOLition Fund’s assets and liabilities to each Series. This is called the “Series’ Pool”.

The assets for each Series’ Pool will include:

• the Cash Investments. These Cash Investments will not necessarily be physical holdings of cash, but may be notes, deposits or other cash investments. It is proposed that the initial Cash Investments will be notes issued by Macquarie Group Limited which provide a fixed rate of interest. Cash Investments are made with the aim that they will accrue by Maturity to an amount at least sufficient to ensure that the value of an Investor’s investment in the VOLition Series at Maturity (subject to early redemptions by the Investor) is at least equal to the Protected Value. The Protected Value will be a proportion (the Series Percentage) of the amount initially invested in the Series; and

• the Index Contract. The Index Contract will provide exposure to the Adjusted Index – being the volatility adjusted performance of the S&P/ASX 200 index (the Index).

Investments are not made taking into account labour standards or environmental, social or ethical considerations on selection, retention or realisation.

The Issue Price, Redemption Price, income and other entitlements of each Series of Units are determined by reference to the Series’ Pool. See below for more information.

Figure 1 below illustrates the VOLition Fund structure.

All Pools will include liabilities incurred in respect of that Pool and a share of other VOLition Fund liabilities (See Appendix A.1 for details). Because VOLition Fund is one trust, in unusual circumstances (if one Series Pool had net liabilities) one Series Pool could affect the performance of others.

2.2. The Series available under this Offer

The Series of the VOLition Fund Offered under this PDS are listed in the table that follows, together with their Maturity Date, indicative Series Percentage and Protected Value at Maturity, indicative Threshold and Observation Date.

The Responsible Entity may also offer series of the VOLition Fund other than the Series listed in this PDS.

The information in the following table is relevant to the Cash Investments and Index Contracts for each Series. Please consider the information in conjunction with Sections 2.4 and 2.5 of this PDS.

Investors should be aware that none of the Responsible Entity or any other Macquarie Group company expresses any view as to the future performance of the Index or Index Contract for any Series, or any Deliverable security. The Offer of any of the VOLition Fund Series is not an indication of any level of expected future performance of any Index, Contract Counterparty or Deliverable.

i. Eligible Applicants:

This Offer is only open to Eligible Applicants. Eligible Applicants for a Series are those Investors who the Responsible Entity is satisfied are existing Macquarie Group clients who currently hold a Macquarie investment listed in the following table and are switching from that investment into the corresponding VOLition Fund Series in that table. When you complete the Application Form you will need to select the name of your current Macquarie investment.

The Responsible Entity reserves the right to reject Applications without giving any reason.

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Series A Pool • Index Contract • Cash Investments

Series B Pool • Index Contract • Cash Investments

Series B Units

Series C Pool • Index Contract • Cash Investments

Series A Units Series C Units

Investors (Holding Series of Units)

VOLition Fund

Other Series assets

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ii. Indicative Series Percentage:

The Series Percentage has application to both the Index Contract and the Cash Investments for a Series.

The Protected Value of a Unit in a Series at Maturity is the Series Percentage of the Issue Price for that Unit in that Series under this PDS. This is the amount of the initial investment in a Series that the Responsible Entity aims to protect at Maturity by investing in the Cash Investments.

In addition, the Index Contract for a Series gives an exposure to the Adjusted Index of an amount initially equal to the Series Percentage of the Issue Price for that Series for each Unit still in issue at Maturity of the Series.

The indicative Series Percentage for each Series is set out in Table 1 below.

The Series Percentage is not determined until the close of business on the business day prior to the Issue Date for the Series.

The level of the Series Percentage is affected by the level and volatility of the Index, the interest and other return rates on the Cash Investments and the time to the Maturity for each Series.

Please check the VOLition Fund website at www.macquarie.com.au/volition for updates prior to the Issue Date in relation to indicative Series Percentage and Protected Values for each Series.

iii. Threshold Percentage:

The Threshold is the level above which the Adjusted Index must rise for there to be value deliverable by the Contract

Counterparty around the time of Maturity under the Index Contract for the Series.

The Threshold is a percentage of the Index level when the Index Contract for the Series commences (being an Index level as at an ASX trading day closing time on the Issue Date, without regard to after hours or other trading outside of the regular trading session hours). The Threshold is anticipated to be in the range 100% - 115% of the starting Index level and will be available on the VOLition Fund website at www.macquarie.com.au/volition.

iv. Maturity:

The value of your investment at Maturity will comprise: 1. the value of the Cash Investments;

plus 2. the value of the Deliverable under the Index

Contract (if any).

Please see Section 3.5 below for the available options for investors at Maturity.

v. Observation Date:

This is the date on which the Adjusted Index level is measured for the purpose of calculating the amount of the Deliverable under the Index Contract for the Series, if any. In certain circumstances the Observation Dates may change. See section 2.5 and Appendix A.3 for further details.

Series Eligible Applicants must hold (i)

Indicative Series Percentage at Maturity (as percentage of the Unit

Issue Price of $1.00) and Protected Value per Series Unit (ii)

Indicative Threshold (iii)

Maturity (iv) Observation

Date (v)

Series A – MQ Multi – S1;

MQ Multi-Strategy Fund - Capital Protected – Series 1 units

111% : $1.11 105% 1 June 2012 18 May 2012

Series B – MQ Multi – S2;

MQ Multi-Strategy Fund - Capital Protected – Series 2 units

116% : $1.16 100% 3 June 2013 20 May 2013

Series C – MQ Equity Income; and

MQ Equity Enhanced Income Fund units

108% : $1.08 100% 3 June 2013 20 May 2013

Series D – MQ Geared Equity Income.

MQ Geared Equity Income Fund units

122% : $1.22 100% 2 June 2014 19 May 2014

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2.3. The Investments

On or as soon as reasonably practicable after the Issue Date the proceeds from the Offer for each Series will be invested.

The proceeds of the Offer for each Series will be used by the Responsible Entity to purchase:

1 the Cash Investments; and 2. Index Contracts.

These investments are further described in Section 4 of this PDS.

2.4. Cash Investments

A portion of the funds raised from the Offer of a Series will be used by the Responsible Entity to purchase the Cash Investments.

The amount invested by the Responsible Entity in the Cash Investments for a Series will be the amount assessed by the Responsible Entity as the residual amount raised from the Offer of Units in the Series under this PDS after purchasing the Index Contract and paying upfront fund expenses and aims to be at least the amount required to grow so that in usual circumstances the Cash Investments at the Maturity Date is at least equal to the Protected Value of an Investor’s initial investment in the Series. See Table 1 in Section 2.2 of this PDS for the indicative Protected Value for the Series.

The Responsible Entity has agreed to acquire unsecured notes from Macquarie Group Limited which will form the initial Cash Investments. These notes are anticipated to be held to Maturity; however they may be replaced with other Cash Investments, such as notes, bonds, and fixed term deposits or like investments. These unsecured notes are not deposits with Macquarie Bank Limited. Macquarie Group Limited is not a bank and there is no form of Government or other guarantee associated with the unsecured notes.

There is no assurance that the Cash Investments for each Series will equal the Protected Value of an Investor’s initial investment in the Series at Maturity. In addition, if you redeem your investment in a Series prior to Maturity (should this opportunity be available) the amount payable to you may be less than the amount that you initially invested in the Series (i.e. less than the Issue Price paid to acquire your Units).

The Responsible Entity has the right to redeem the Cash Investments before Maturity if an event of default occurs (such as a failure by Macquarie Group Limited to pay any amount due on the Cash Investments). Macquarie Group Limited also has the right to redeem the Cash Investments if certain taxation events occur. See Appendix A.2 for more information.

2.5. Index Contract

The Index Contracts will be entered into to provide the relevant Series’ Units with varying participation in the daily gains and losses of the S&P/ASX 200 index (the Index). The level of participation will vary depending on the Index volatility each ASX trading day. The level of the Index, adjusted up or down for this volatility adjusted participation, is the Adjusted Index.

In return for a payment that is made by the Responsible Entity to the Contract Counterparty when the Index Contract commences, around the time for Maturity the Responsible Entity will be entitled to receive Deliverables from the Contract Counterparty. The amount of the Deliverables (if any) will depend on accrued performance of the Adjusted Index when finally determined for Maturity.

Amount subject to Index exposure: An amount equal to the Series Percentage of the Issue Price of each Unit in a Series will be subject to the Index exposure while it remains in issue.

For the Series Offered under this PDS the indicative Series Percentage is set out in Table 1 in Section 2.2 of this PDS. If the Series Percentage is 100% then, because the Issue Price of a Unit is $1.00 the whole $1.00 value is the amount that is subject to the Index exposure. If the Series Percentage were 95%, the amount subject to the Index exposure would be $0.95 and if it were 125% the amount subject to the Index exposure would be $1.25.

The participation of that exposed amount to the daily gains and losses of the Index will then move up or down each ASX trading day in accordance with the Variable Participation Methodology.

That methodology adjusts the level of participation in the performance of the Index on any day, based on the annualised volatility of the Index over the last 60 ASX trading days (“Volatility”).

In periods of:

• high Volatility: exposure to the Index will be reduced and could be zero (note that this may be the case where the trend is that the Index is increasing in value as well as falling);

• low Volatility: exposure to the Index will be increased up to a maximum exposure of 150% (note that this may be the case where the trend is that the Index is falling in value as well as where it is rising).

This exposure, like leverage, has the potential to magnify any poor performance of the Index. For example where the exposure is 150% and the Index falls by 5% on a day, the Variable Participation

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Methodology will result in a 7.5% fall in the Adjusted Index level for that day. See Section 4 of this PDS for more information.

If at Maturity there is an overall gain in the Adjusted Index so that the Adjusted Index is above the Threshold for that Series, the Contract Counterparty is required to deliver to the Responsible Entity an amount of cash or Deliverable Securities (see below and Section 4 of this PDS for further details)

Who the contract is with: The Index Contracts will be between the Responsible Entity and the Contract Counterparty (see Section 5.3.2 of this PDS).

The Index: the S&P/ASX 200 index. Information about the Index can be found on the ASX website at www.asx.com.au/research/indices.

*The index sponsor has not participated in the preparation of this PDS. See the inside front cover of this PDS. This Index is subject to change in some circumstances for example where the Index ceases to be published (see Appendix A.3 of this PDS).

Thresholds: For each Series, the overall gain from the Adjusted Index must exceed a specified percentage of the initial Index level (at the commencement of the Index Contract), before there will be any value deliverable by the Contract Counterparty at Maturity. This is known as the Threshold.

Value of the Index Contract: The value deliverable by the Contract Counterparty under the Index Contract is only deliverable for Maturity.

As the value of the Index Contract will depend on the cumulative daily participation (which may be nil) in the performance of the Index, the value deliverable under the Index Contract at or before Maturity could be nil even when the Index has risen since the Index Contract commenced.

Examples of the calculation of the value of the Deliverable at Maturity are provided in Section 4 of this PDS.

The Deliverable: The return (if any) under an Index Contract that is to be provided at or around Maturity is to be provided in the form of a Deliverable. The Deliverable will be in either:

• cash; or

• Deliverable Securities.

The Deliverable (if any) will be in cash unless the Responsible Entity requests that some or all of it to be in the form of Deliverable Securities. To the extent requested by the Responsible Entity, the Contract Counterparty must deliver any Deliverable as Deliverable Securities rather than cash.

In determining whether or not to request that all or part of the Deliverable be in the form of Deliverable Securities instead of cash, the Responsible Entity aims to receive at least sufficient cash to meet all Maturity Redemption Requests and any relevant expenses of the Series.

See Appendix A.3 for more information.

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PK Investing in the VOLition Fund 3.1. Responsible Entity

The Responsible Entity offers and issues the Units and operates the VOLition Fund. MAAML is the current Responsible Entity. It is a wholly owned subsidiary of the Macquarie Group and holds an Australian Financial Services Licence from ASIC which authorises it to act as the responsible entity of the VOLition Fund.

The Responsible Entity is responsible for managing the VOLition Fund in accordance with the Constitution and the Corporations Act (which, as described in Section 5.3 of this PDS, provide for its retirement or removal) but may appoint third parties to assist it in performing those functions.

The Cash Investments for each Series will initially be unsecured notes issued by Macquarie Group Limited. The Index Contract for each Series will be between the Responsible Entity and a Contract Counterparty. A description of those arrangements is contained in Appendix A.2 and A.3 of this PDS.

The Responsible Entity will be responsible for calculating the Net Asset Value of each Series and publishing that value at least quarterly.

Investors should note that the Responsible Entity will not actively manage the investments made for each Series.

3.2. Issue Price of Units

The Issue Price for Units acquired in a Series pursuant to this PDS is $1.00 per Unit.

Any subsequent issues of Units in a Series (for instance on reinvestment of income) will be at the Issue Price determined by reference to the Net Asset Value of the Series plus any transaction costs. The Net Asset Value of each Series and the VOLition Fund will be determined by the Responsible Entity at least quarterly based on the market price of assets and liabilities.

3.3. Transfer, Withdrawal and Maturity

3.3.1. Generally

Whilst you may request redemption of your investment in a Series as described below, there is no right of redemption except at the Series Maturity and you should have the intention to hold your investment until at least the Series Maturity.

3.3.2. Transfer

As Units in the VOLition Fund are not quoted on the ASX or any other stock exchange, it is unlikely that there will be a secondary market for the transfer of Units. The Responsible Entity has discretion whether to accept or reject any transfer.

3.3.3. Redemptions

You may apply to the Responsible Entity to redeem some or all of your Units in a Series. The Responsible Entity has discretion whether to accept or reject a redemption request other than a Maturity Redemption Request. Any redemption requests accepted prior to Maturity will not be processed more frequently than quarterly. The first redemption after the issue of Units in the VOLition Fund would be processed for the quarter ending 31 October 2009.

A redemption request:

• must be in respect of Units in a Series whose redemption would give rise to redemption proceeds of at least $10,000 (or if your total holding for the Series would if redeemed provide less than $10,000 in redemption proceeds, must be in respect of your total holding for the Series); and

• must be made in writing and in a form approved by the Responsible Entity.

A redemption request may not be accepted if it would result in the Investor holding Units in a Series with a value of less than $10,000.

If a request is accepted, the Responsible Entity will nominate a date for the redemption of the Units. The Responsible Entity will tell you whether your request has been accepted. If it does not tell you otherwise within 3 months after it receives your request then the request is deemed denied.

The Redemption Price will be calculated at the time of the redemption and paid without interest as soon as practicable, but usually within 2 months, after the acceptance of the redemption request.

You should note that the Responsible Entity may be unable to redeem Units where it cannot readily realise Series assets to provide proceeds to fund that redemption request. The Responsible Entity’s ability to realise sufficient Series assets to fund a redemption will depend on the terms of the Cash Investments and Index Contract and any expenses and liabilities attributed to the Series. You should note that Macquarie Group Limited has agreed with the Responsible Entity that 20% of the notes to be issued to the Responsible Entity as Cash Investments and held as part of each Series’ Pool will be redeemable prior to Maturity. To the extent that less than 20% of the notes have been redeemed, redemptions of notes are expected to be available at the end of each quarter, provided that at least 7 days prior notice has been given of redemption (see Sections 2.4 and A.2 of this PDS for further information). This will allow a release of cash to the

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VOLition Fund to allow the Responsible Entity to meet some redemption requests (which (if any) are not likely to be more frequently than quarterly and usually only if at least 14 days notice has been given). Once the 20% of Cash Investments that are redeemable Cash Investments have been redeemed for a given Series, it is anticipated that no further redemptions will be possible prior to Maturity for that Series.

In considering whether or not to invest in a VOLition Fund Series you should be prepared to remain invested in that Series until at least Maturity, as you may not be able to redeem prior to Maturity. Appendix A.2 sets out further details on the Macquarie Group Limited unsecured notes held as the initial Cash Investments.

3.3.4. Redemption Price

Redemption Price is calculated based on the Net Asset Value of the Series less any transaction costs at the time of redemption. Values of assets and liabilities of the VOLition Fund and for each Series are calculated using market methods (see Appendix A.1 of this PDS).

The redeeming Investor must pay all costs incurred in connection with the redemption of their Units to the extent that those costs are not fully recognised in the Redemption Price of those Units. Such amounts may be deducted from the amount payable to the Investor in connection with the redemption and will include a withdrawal fee. Please refer to Section 6 Fees and other costs in this PDS.

In the event you are able to redeem your investment in a Series prior to Maturity, the Redemption Price will be affected by the realisation values of the Cash Investments and Index Contract for the Series.

For example, early redemption of your investment will result in the Index Contract for that Series being partially terminated at a value that takes into account break costs (which may mean that the realised value of the Index Contract is reduced and may be nil).

Similarly, amounts received on the redemption of the Cash Investments before their maturity are based on market value which may include break costs potentially reducing the value of the Cash Investments in comparison to the value of the Cash Investments on a “hold to Maturity” basis.

Accordingly, prior to Maturity, your investment may be worth less than your initial investment in that Series.

Appendix A sets out further details of the terms of the Cash Investments and Index Contracts including the amount payable (if any) to the Responsible Entity in respect of a partial termination of an Index Contract before Maturity.

Part of any redemption proceeds may include distributions of the taxable income of the VOLition Fund for the year of the redemption.

3.4. What happens at Maturity

Value of Cash Investment: At Maturity if the aim of the Responsible Entity has been achieved, the Cash Investments for each Series will have a value that at least equals the Protected Value of the initial investment in the Series (all income reinvested in the Series is not counted as part of the “initial investment”).

On or before Maturity, some or all of the Cash Investments for a Series will be applied to meet any redemptions under Maturity Redemption Requests for that Series.

The remaining amount of Cash not paid out to meet redemptions will continue to be held (on terms satisfactory to the Responsible Entity, but generally on at call terms) with Macquarie Group Limited or such other financial institution as the Responsible Entity determines.

Index Contract - Receipt of any Deliverable: At or around Maturity, the amount (if any) of the value to be provided by the Contract Counterparty will be determined and delivered to the Responsible Entity (see Sections 2.5 and 4 of this PDS).

The value is to be provided in cash or Deliverable Securities. To the extent that the amount to be provided under the Index Contract is received as Deliverable Securities those Deliverable Securities will be held by or on behalf of the Responsible Entity until termination of the Series, after any realisations necessary to effect redemptions and pay any operating and transaction costs of the VOLition Fund (referable to that Series).

Any remaining cash Deliverables not required to meet redemptions will either be:

• used to purchase and then hold Deliverable Securities; or

• held (on terms satisfactory to the Responsible Entity, but generally on at call terms) with Macquarie Group Limited or such other financial institution as the Responsible Entity determines as permitted for the VOLition Fund including for payment of ongoing fees and expenses of operation of the VOLition Fund (see Section 6 and Appendix A for further information).=

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3.5. Maturity – Investor options

Maturity Redemption Requests: Investors can request redemption of their Units in a Series to occur on or around Maturity by lodging a Maturity Redemption Request. Maturity Redemption Requests must be received by the Responsible Entity at least six weeks before the Maturity of the Series (unless the Responsible Entity allows later receipt). Units will in normal circumstances then be redeemed by Maturity for their Redemption Price calculated as referred to in Section 3.3.4 of this PDS above. The Redemption Price may include distributions of the taxable income of the VOLition Fund for the year of the redemption.

The Redemption Price will be calculated at the time of the redemption and paid without interest as soon as practicable, but usually within 21 days of Maturity and no later than 2 months, after the redemption.

The ability to redeem Units by Maturity depends on whether the VOLition Fund is liquid, which in turn depends on Macquarie Group Limited and the Contract Counterparty meeting their obligations under the Cash Investments and Index Contracts respectively.

Investors holding Units past Maturity: To the extent that Investors do not have their Units in a Series redeemed at Maturity, that Series will continue to hold Cash Investments and potentially some of the securities that form part of the Deliverable Securities provided under the Index Contract (or that are purchased with the Deliverable received in cash). Investors who remain invested in a Series after Maturity will have full exposure to any market fluctuations and other influences which may result in an increase or a decrease in value of the Series’ assets (whether they are cash or securities or both). Investors will also be exposed to all fees and expenses of the relevant Series after Maturity (which fees and expenses are different to those that apply before Maturity). There is no assurance that the value of any Units, any Series or the VOLition Fund will be maintained after Maturity and the Responsible Entity will not actively manage any Series’ Pool after Maturity. The value of the Series’ assets may fall after Maturity and the assets may become illiquid. If the value of any securities held in respect of a Series were to fall to zero and the value of the balance of the cash assets held in respect of that Series also fell (for example as a result of fees and expenses), the overall value of the Series could be reduced so that it is less than the amount that Investors initially invested in the Series.

For investors in a Series who do not elect to redeem their Units at Maturity the Responsible Entity intends to request delivery of Deliverable Securities under the Index Contracts for that Series (rather than cash). If the Contract Counterparty to the Index Contracts delivers cash rather than the Deliverable Securities, then the Responsible Entity will seek to use that part of the cash not used to fund Maturity Redemption Requests and

ongoing fees and expenses relating to that Series to purchase and then hold the Deliverable Securities. The securities held by the Responsible Entity will not be actively managed.

If any Deliverable Securities are delivered to the Responsible Entity, they will generally be held by the Responsible Entity until realised as a result of redemption requests by Investors in the Series, for ongoing fees and expenses of the VOLition Fund, or termination of the Series or termination of the VOLition Fund.

Please ensure that you carefully consider disclosures about fees in Section 6 of this PDS.

3.6. Distributions

Income for the VOLition Fund and for each Series is to be determined each Financial Year (as if the Series were separate trusts). The VOLition Fund will distribute all of its taxable income each year amongst Unit holders in accordance with the income determinations for each Series.

Until Maturity the Responsible Entity will require any distributions to be reinvested by applying those distributions to acquire further Units in the relevant Series. As you will not physically receive those distributions you will have to pay any tax on those distributions from your own sources. You cannot elect to physically receive distributions on Units.

3.7. Minimum Investment

The minimum investment that may be applied for in respect of any Series under this PDS is currently $10,000 but the Responsible Entity reserves the right to vary that minimum at its discretion. There is no maximum investment in any Series.

The minimum aggregate investment for each Series is approximately $200,000 per Series but the Responsible Entity can in its discretion accept a lesser amount for any Series (known as the “Minimum Series Size”). The target minimum aggregate investment for the VOLition Fund is approximately $2,000,000 but the Responsible Entity can in its discretion accept a lesser amount for the VOLition Fund (known as the “Minimum Fund Size”). If the Minimum Series Size is not reached for a Series, or the Minimum Fund Size is not reached for the VOLition Fund, the Responsible Entity may exercise its discretion not to issue Units in that Series or withdraw the Offer.

The Responsible Entity may offer series of the VOLition Fund other than the Series listed in this PDS. In this case the Minimum Fund Size also includes the aggregate investment under all series in the VOLition Fund.

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If Units in a Series are not issued within 3 months of the date of this PDS, the Responsible Entity will not proceed with the issue for the Series. If the Responsible Entity does not issue Units in that Series and it has received Application monies from you those monies will be returned to you (however any interest paid on the account in which those Application monies were held will be retained by the Responsible Entity).

3.8. Cooling Off

Investors in the VOLition Fund are entitled to return their Units and cancel their investment by giving written notice to the Responsible Entity at any time within the Cooling Off Period. If you cancel your investment you will then have your Application monies (after adjustment for movements in the value of your investment) returned without interest.

The Cooling Off Period is the period of 14 days commencing on the earlier of:

a) the date the issue of Units is confirmed to you and

b) the end of the fifth business day after the date of issue of Units.

Please refer to the Key dates on Page 4 of this PDS for the anticipated Issue Date for Units applied for pursuant to this PDS.

After the Cooling Off Period ends you will only be able to withdraw from your investment by any redemption (see Section 3.3 of this PDS).=

3.9. Term of a Series

A Series will continue while the VOLition Fund continues unless it is terminated earlier. A Series will not necessarily end at its Maturity unless all Investors have redeemed their Units in the Series. This allows Investors

to continue to have exposure to any assets (such as any cash and the Deliverable) held by the Responsible Entity after Maturity. For example, this may include any Deliverable Securities delivered by the Contract Counterparty to the Responsible Entity as the Deliverable under the Index Contract, or any cash that is received as the Deliverable and is applied to acquire securities after providing for redemptions to be effected at Maturity (as described in section � of this PDS).

However, Investors should note that a Series will terminate after its Maturity if the size of the Series becomes less than the Minimum Series Size (please see section 3.7) or the value of the Series’ Pool becomes zero (or less).

A Series can also be terminated at any time if Investors who hold Units in the Series determine by the required majority (of 75% of votes of Unit holders in the Series) that the Series should terminate or the Responsible Entity gives notice of termination of the Series to Investors, which it could only do if it considers it in the best interests of Investors.

3.10. Term of the VOLition Fund

The VOLition Fund will have a term of 80 years unless terminated earlier by the Responsible Entity or otherwise under the terms of the Corporations Act. The Responsible Entity can terminate the VOLition Fund if it considers that this would be in the best interests of Investors. The VOLition Fund can also be terminated by a meeting of Unit holders passing a resolution of the required majority of members of the VOLition Fund (i.e. all Series). The required majority is 50% of the total votes that may be cast by Investors in the VOLition Fund entitled to vote.

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QK The Index Contracts Each Series’ Pool will contain an Index Contract which will provide the Series with varying exposure to the daily gains and losses of the S&P/ASX 200 Index (“Index”).

The level of participation in the daily gains and losses of the Index is adjusted each ASX trading day based on the Volatility of the Index (which generally reflects market volatility). In periods of high Volatility, participation in the gains and losses of the Index will be relatively low and potentially 0%, while in periods of low volatility, participation will be relatively high, potentially beyond 100% and up to150%.

What is Volatility?

Volatility generally refers to the fluctuation in value of an asset, index or other type of security over a given period of time. If the asset, index or other type of security’s value moves up and down rapidly over short periods it has high volatility. If the value does not fluctuate materially it has low volatility. The greater the volatility of an asset, index or security, the less certain an Investor is of a return.

The Index Contracts are entered into with the Contract Counterparty.

4.1. Description of the Index

The Index to which each Series of Units will have exposure under the Index Contracts is the S&P/ASX 200 Index. In some circumstances (such as where the Index ceases to be published and a suitable replacement index exists) another index may be substituted for the S&P/ASX 200.

The Index was first published on 31 March 2000 to represent the top 200 Australian domiciled companies listed on the Australian Securities Exchange (the “ASX”). It is a market-capitalisation weighted and float-adjusted stock market index of Australian stocks listed on the ASX. The Index Sponsor of the S&P/ASX200 is Standard & Poor’s. Neither ASX nor Standard and Poor’s has participated in the preparation of this PDS and neither of them endorse or accept liability in relation to VOLition Fund or any Series or Index Contract. Please see the statement about them on the inside front cover of this PDS.

Figure 1 shows the past performance of the Index between March 2000 and May 2009 and the Volatility of the Index over the same period.

Figure 1: Historical Performance and Volatility of the S&P/ASX 200 index

0%

10%

20%

30%

40%

50%

60%

70%

0

1000

2000

3000

4000

5000

6000

7000

8000

Volatility (LHS)

ASX 200 Index (RHS)

=You should note that past performance of the S&P/ASX 200 index is not an indicator of its future performance or the performance of an investment in the Fund. Also note that historical volatility is not a reliable indication of future volatility.

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Past performance of the Index and its Volatility may not be indicative of its future performance or Volatility. In addition, the value of Units in any Series depends on factors other than performance of the Index, and so the value of Units will not track the Index. In particular, you should note that the performance of the Index Contract for a Series will not correspond to the performance of the S&P/ASX 200 index as the participation in the cumulative daily gains and losses of the Index will be adjusted on any day based on the average past Index volatility (this method of participation adjustment is referred to as the Variable Participation Methodology).

4.2. What is the Variable Participation Methodology?

The Variable Participation Methodology varies the extent to which the Index Contract participates in the daily gains and losses of the Index.

The level of participation (known as the “Participation Rate”) varies from day to day depending on the annualised volatility of the Index over the previous 60 ASX trading days (“Volatility”). The indicative Participation Rates relating to different levels of Volatility are provided in Section 4.3 of this PDS.

Generally, the higher the level of Volatility, the lower the participation in the gains and losses of the Index and the lower the Volatility, the higher the participation. The Participation Rate for a day could be as little as 0% (meaning that the Index Contract does not participate in the gains or losses of the index for that day) or could be as high as 150% (meaning the Index Contract is exposed to 1.5 times the gains or losses of the Index for that day).

Please see Section 5 of this PDS for the risks associated with the Variable Participation Methodology.

4.3. Adjusted Index and Participation Rates

The Participation Rate refers to the extent that the Adjusted Index will participate in any gains and losses of the Index. If the Participation Rate for a day is over 100%, it will increase the exposure to the Index which means you will participate to a greater extent in any gains (or losses) of the Index for that day. If it is below 100%, it will reduce the exposure to the Index which means you will have reduced participation in the full extent of any gains (or losses) of the Index for that day.

The daily Participation Rate of your Units will depend on the Volatility of the Index. Table 2 sets out the indicative Participation Rates for differing levels of Volatility. The actual Participation Rates for the differing levels of Volatility in Table 2 below will be determined on or around 14 August 2009, and published on the VOLition Fund’s website at www.macquarie.com.au/volition. The actual Participation Rates could be different to the indicative Participation Rates in Table 2 below depending on the level of volatility in the market

reflected in the Index at the time the actual Participation Rates are set on or around 14 August 2009.

During the term of an Index Contract, Volatility will be determined daily using a specific formula based on the previous 60 ASX trading days1. The relevant actual Participation Rate for a day will then be applied to determine the extent to which the Series participates in the performance of the Index for that day. This will continue daily until the Observation Date or earlier termination of the Index Contract.

Table 2: Indicative Participation Rates for differing levels of Volatility

Volatility

Greater than but less than or equal to

Indicative Participation Rate

0.0% 8.0% 150.00% 8.0% 9.0% 145.00% 9.0% 10.0% 140.00% 10.0% 11.0% 135.00% 11.0% 12.0% 130.00% 12.0% 13.0% 125.00% 13.0% 14.0% 120.00% 14.0% 15.0% 115.00% 15.0% 16.0% 110.00% 16.0% 17.0% 105.00% 17.0% 18.0% 100.00% 18.0% 18.5% 96.70% 18.5% 19.1% 93.30% 19.1% 19.6% 90.00% 19.6% 20.1% 86.70% 20.1% 20.7% 83.30% 20.7% 21.2% 80.00% 21.2% 21.7% 76.70% 21.7% 22.3% 73.30% 22.3% 22.8% 70.00% 22.8% 23.3% 66.70% 23.3% 23.9% 63.30% 23.9% 24.4% 60.00% 24.4% 24.9% 56.70% 24.9% 25.5% 53.30% 25.5% 26.0% 50.00% 26.0% 26.5% 46.70% 26.5% 27.1% 43.30% 27.1% 27.6% 40.00% 27.6% 28.1% 36.70% 28.1% 28.7% 33.30% 28.7% 29.2% 30.00%

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Table 2 (continued) Volatility

Greater than but less than or equal to

Indicative Participation Rate

29.2% 29.7% 26.70% 29.7% 30.3% 23.30% 30.3% 30.8% 20.00% 30.8% 31.3% 16.70% 31.3% 31.9% 13.30% 31.9% 32.4% 10.00% 32.4% 32.9% 6.70% 32.9% 33.5% 3.30% 33.5% N/A 0.00%

As at 28 May 2009, Volatility of the Index was approximately 27.3%, and accordingly, the Participation Rate which would have applied to calculate the Adjusted Index for the next trading day would have been approximately 40%. However you should note that past Volatility levels of the Index are not an indicator of its future levels of Volatility.

Examples:

Volatility Participation Rates

Effect on the Adjusted Index Example

18% 100% The Adjusted Index will increase or decrease by 1% for every 1% the Index moves.

Assume on a given day the preceding 60 ASX trading day Volatility is measured at 18%, this means the Participation Rate for that day would be 100%. If the Index increases 2% that day, the Adjusted Index will increase by 2% x 100%= 2%. If the Index decreases 2% that day, the Adjusted Index will decrease by 2%.

5% 150% The Adjusted Index will increase or decrease by 1.5% for every 1% the Index moves.

Assume on a given day the preceding 60 Trading Day Volatility is measured at 5%, this means the Participation Rate for that day would be 150%. If the Index increases 2% that day, the Adjusted Index will increase by 2% x 150%= 3%. If the Index decreases 2% that day, the Adjusted Index will decrease by 3%.

27.5% 40% The Adjusted Index will increase or decrease by 0.4% for every 1% the Index moves.

Assume on a given day the preceding 60 Trading Day Volatility is measured at 27.5%, this means the Participation Rate for that day would be 40%. If the Index increases 2% that day, the Adjusted Index will increase by 2% x 40%= 0.8%. If the Index decreases 2% that day, the Adjusted Index will decrease by 0.8%.

Please note that this is an illustrative example only to show how the Participation Rate might affect the participation of the Index Contract in the gains or losses of the Index on any given day. It is not an indication of how your investment will necessarily actually perform. Actual Participation Rates for those levels of Volatility, actual Volatility and returns may all differ materially.

The examples above demonstrate how your investment will not vary in the same way as the value of the Index varies and can cause your losses to exceed those of the Index, and your gains to be less than those of the Index. In particular you should note that:

• Where positive performance of the Index is accompanied by high levels of past Volatility, the Variable Participation Methodology can mean that the Adjusted Index will not increase despite any gain in the Index

• Conversely, where negative performance of the Index is accompanied by low levels of past Volatility, the Variable Participation Methodology can cause the Adjusted Index to decrease by more than the Index loss.

Also, given that the past Volatility is based on the volatility over the preceding 60 trading days, the Variable Participation Methodology may cause a lag in a Series (and accordingly the value of an Investors’ Units) potentially benefiting from increased exposure to an ongoing gain (or benefiting from decreased exposure to any ongoing loss) seen in the Index where that ongoing gain (or loss) is preceded by an extended period of high (or low) levels of past Volatility.

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4.4. The effect of Extraordinary Events and termination rights on Index Contracts

4.4.1 What is an Extraordinary Event?

Events known as “Extraordinary Events” may have an affect on the Index Contract. The final events that constitute Extraordinary Events (and the effect of those events) will be agreed between the Responsible Entity and the Contract Counterparty but may include events such as:

• the Index ceasing to be published, with or without an alternative suitable index (as determined by the Contract Counterparty) being available;

• a material change in the formula or method for determining the level of the Index occurs;

• the Contract Counterparty being unable, after using commercially reasonable efforts, to hedge its risks in relation to the Index Contract (including price risk and foreign exchange risk); or

• the Contract Counterparty’s cost of hedging its risks under the Index Contract being materially increased compared to at the Issue Date (unless the increased cost has resulted from a deterioration in the Contract Counterparty’s creditworthiness).

Please see Appendix A.3 of this PDS for further details on Extraordinary Events.

4.4.2 What is the effect of an Extraordinary Event?

The effect of an Extraordinary Event occurring will be agreed between the Responsible Entity and the Contract Counterparty on commercial terms before the Index Contracts are entered into. However, depending on the Extraordinary Event, any of the following may occur:

• termination of the Index Contract;

• substitution of another appropriate index for the S&P/ASX 200 Index; or

• the Contract Counterparty calculating the level of the Index (instead of relying on the published Index level).

Appendix A.3 sets out in further details on what the consequences of an Extraordinary Event may be.

Where the Index Contract is terminated as a result of an Extraordinary Event, an amount may become payable to the Responsible Entity to the extent that the Index Contract (immediately prior to the Extraordinary Event) had value to the Responsible Entity.

4.4.3 Other termination rights in relation to Index Contracts

The Responsible Entity and the Contract Counterparty will each have rights to terminate an Index Contract on the occurrence of specified events. There are a range of events that typically apply including the other party failing to make a payment under the Index Contract when the payment is due to be made (after notice of the default has been given and a period of time allowed for the default to be remedied). Investors should note that if an Index Contract is terminated in these circumstances before Maturity an amount may become payable by the Contract Counterparty to the Responsible Entity in relation to the termination. See Appendix A.3 of this PDS for further details including details of the amount payable on early termination of an Index Contract.

4.5. Value of the Index Contract at Maturity

At Maturity the Deliverables under the Index Contract will be calculated with reference to the value of the Index Contract on the Observation Date.

An example for illustrative purposes only is set out below. It is based on Table 2 in section 4.3, which as previously referred to, contains only indicative Participation Rates for the differing levels of Volatility. The actual Participation Rates for the differing levels of Volatility which are to be set on 14 August 2009 may differ materially.

For this example, assume that the initial Index level at the commencement of the Index Contract is 4,000. This means that the Initial Adjusted Index level is also 4,000.

Each trading day, the level of the Adjusted Index will rise or fall depending on the performance of the Index that day, adjusted for Volatility.

If we assume that:

• At the close of the first trading day, the Index is 4,040 which represents an Index gain of 1.00%

• Volatility of the Index is 27.5% – as set out in Table 2 the indicative Participation Rate is 40%

Then, the level of the Adjusted Index at the end of the first day is calculated as follows:

Adjusted Index = Initial Adjusted Index + (Initial Adjusted Index x Index Return x Participation Rate) = 4,000 + (4,000 x 1% x 40%) = 4,000 + 16 = 4,016

Due to the Volatility of the Index, which determines the Participation Rate, the Adjusted Index did not

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participate fully in the daily return of the Index. As a result, the Adjusted Index did not rise by the same amount as the Index.

On the next trading day the Index fell by 2.5% to a level of 3,939. Assume that the Volatility is 8% and, in accordance with Table 2, the indicative Participation Rate is 150%.

The level of the Adjusted Index at the end of the second day is then calculated as follows:

= 4,016 - (4,016 x 2.5% x 150%) = 4,016 – 150.6 = 3,865.4

As the Participation Rate was 150%, the accrued loss on the Adjusted Index was greater than the corresponding percentage fall in the Index.

Calculation of the value of Deliverables (if any) to be paid under the Index Contract on Maturity

The amount or value of the Deliverable (if any) to be provided to the Responsible Entity by the Contract Counterparty at Maturity is calculated as the greater of:

• Zero; and

• {[(Final Adjusted Index – Threshold) / Initial Adjusted Index] x Protected Value}

Where: Final Adjusted Index = the Adjusted Index level on the Observation Date Initial Adjusted Index = the Index level on the Issue Date. Threshold = the Index level on the Issue Date x Threshold Percentage Protected Value = Issue Price x Units x Series Percentage. This is the amount equal to the Series Percentage of the amount initially invested in the Series subject to adjustment for early redemption. Adjusted Index = the Initial Adjusted Index adjusted on a daily basis for participation in the returns of the Index (as varied by the application of the Variable Participation Methodology) up to the relevant day.

Example – Adjusted Index gain above Threshold:

If you invest $90,090 into the Series A Units and assume that:

• The Series Percentage is 111%

• The Protected Value is then $100,000 ($90,090 x 111%)

• The Initial Adjusted Index is 4,000

• The Final Adjusted Index is 5,000 as determined on the Observation Date

• The Threshold Percentage for Series A is 105%

The amount or value of Deliverable to be provided to the Responsible Entity under the Index Contract on Maturity is then calculated as follows:

{[( Final Adjusted Index – Threshold) / Initial Adjusted Index ] x Protected Value}

5,000 – (4,000 x 105%) x $100,000

4,000

= 5,000 – 4,200 x $100,000

4,000

= 20% x $100,000

= $20,000

Example – Adjusted Index gain below Threshold

If you invest $90,090 into the Series A Units and assume that:

• The Series Percentage is 111%

• The Protected Value is then $100,000 ($90,090 x 111%)

• The Initial Adjusted Index is 4,000

• The Final Adjusted Index is 4,150 as determined on the Observation Date

• The Threshold Percentage for Series A is 105%

As the Final Adjusted Index (4,150) is less than the Threshold (4,200 – being 4,000 x 105%), no Deliverable is required to be provided to the Responsible Entity by the Contract Counterparty at Maturity and accordingly the Index Contract will end without providing any return to the VOLition Fund.

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RK Risks Investors should consider an investment in the VOLition Fund as involving a degree of financial risk and should therefore carefully consider all the following risk factors. These factors are not meant to be an exhaustive list of all potential risks associated with an investment in the VOLition Fund. As well as the risks of this particular product, you should also consider how an investment in this product fits into your overall portfolio.

You should also consider whether the size of your proposed investment in this product is appropriate given the overall size of your investment portfolio. Diversification of your investment portfolio can be used as part of your overall portfolio risk management to limit your exposure to failure or underperformance of any one investment, manager or asset class. In addition to reading the PDS in full, prospective Investors should consult their own legal, tax and financial advisers regarding all of risks associated with investment in the VOLition Fund taking into account the investor’s needs, objectives and financial and taxation circumstances.

5.1. Global Economic Conditions

As a result of the current global economic crisis, most global economies have experienced a synchronised downturn in 2008 and 2009 and there is uncertainty about the future global economic outlook. This, in addition to the general fall in equity markets seen since July 2007, has seen markets becoming highly volatile which implies a greater level of risk for Investors than an investment in a more stable market. It is difficult to assess what the full effect of the global economic crisis might be and the impact it will have in relation to ongoing levels of the Index and the financially stability of the Counterparties. A recovery in global or regional economies may depend on factors such as improved liquidity, a restored positive economic outlook and a period of stability in asset prices. Recently, there have been concerted efforts and unprecedented stimulus actions from governments across the globe to support world economies. It is possible that these stimulus actions (or their withdrawal) could have an adverse effect on global economic conditions.

5.2. Index performance risk

Each of the VOLition Fund Series will have exposure to the Responsible Entity’s investment in an Index Contract. Any returns from such contracts depend on the daily performance (gains or losses) and Volatility of the Index for the period up to the Observation Date (see Section 4 and Appendix A.3 of this PDS). There is a risk that the Index will not increase in value, you will not participate in any gains of the Index (due to high Volatility), you may have more than 100% (and up to 150%) participation in any losses of the Index (due to low Volatility) and you do not make a gain under the Index Contract at Maturity.

Volatility: The period from June 2005 to July 2007 may be characterised by generally favourable investment conditions with rising equity markets and steady or moderate increases in interest rates. Within that overall period there were variations from this general trend (for instance, in mid-2006). More recently from July 2007 and in particular since mid 2008 equity markets have fallen and experienced an upswing in volatility. Accordingly, favourable investment conditions will not necessarily prevail in any particular period or over the longer term. As a result, the value of an investment with exposure to the Index may decrease.

As a result, even if the Index has performed well after the Issue Date for the Series, if the level of the Index subsequently falls (including a fall on its Observation Date) your potential returns from the Index Contract would be negatively affected and the Index Contract could expire with no value. In this regard, investors should note that the return from an Index Contract may be affected not only by the longer term performance of the Index but also by short term Volatility in the level of the Index.

5.3. Counterparty and Institutional risk

Where there is reliance on an entity, including the Responsible Entity, or a Counterparty to any investment held for the VOLition Fund, to perform any obligation there is the risk that the entity will fail to perform the particular obligation or will not perform in a timely or optimal manner.

See below for more information and the possible consequences of a failure of the Responsible Entity or Counterparty.

5.3.1. Macquarie Group Limited

As the Responsible Entity intends to invest in Cash Investments with Macquarie Group Limited, Investors are exposed to the creditworthiness of Macquarie Group Limited.

The obligations of Macquarie Group Limited under the Cash Investments are not deposit liabilities of Macquarie Group Limited or Macquarie Bank Limited and they are not guaranteed by any party. The Banking Act 1959 (Cth) obligations in respect of deposits will not apply to the obligations of Macquarie Group Limited in respect of the Cash Investments.

If Macquarie Group Limited fails to pay any amount to the Responsible Entity under the Cash Investments when due, the value and ability to redeem your Units may be affected. The insolvency or other inability of Macquarie Group Limited to pay any amount owing on the Cash Investments could affect the

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Responsible Entity’s ability to pay the VOLition Fund’s liabilities resulting in the VOLition Fund defaulting under its Index Contracts. This would be likely to have a negative impact on the value of your Units.

Please see section 9.1.2 for further information on Macquarie Group Limited.

5.3.2. Contract Counterparty

The Responsible Entity will enter into Index Contracts with a third party. The third party is referred to in this PDS as the Contract Counterparty. See Section 4 and Appendix A.3 of this PDS for more information on the Index Contracts.

If the relevant VOLition Fund Series does not receive the amount (if any) payable by the Contract Counterparty under the Index Contract at Maturity (that is, the Deliverable), there is no obligation for the VOLition Fund to pay the amount that it should have but did not receive to the relevant Unitholders in the Series. Therefore if the Contract Counterparty does not pay to the Responsible Entity the Deliverable (if any) payable under the Index Contract, the value of an Investor’s Units will be negatively affected.

The Responsible Entity will only enter into Index Contracts with a Contract Counterparty that has an S&P credit rating of at least A-, or are guaranteed by an entity that has an S&P credit rating of at least A-, at the Offer Close date. However please note the credit rating of the Contract Counterparty may change after the Offer Close date or throughout the term of the Index Contract.

The Responsible Entity accepts no liability or responsibility for, and makes no representations regarding the ability of the Contract Counterparty to perform its obligations in relation to the Index Contracts or in relation to the provision of the Deliverable (if any). Investors must make their own assessment of the minimum S&P credit rating above, and in particular, must consider the acceptability of financial institutions with this minimum credit rating mentioned above before deciding to invest. None of Macquarie Group Limited, Macquarie Bank Limited, the Responsible Entity or any other Macquarie Group company guarantees any particular rate of return, or the performance of, the VOLition Fund, any investment, the Index or any Deliverable Security, nor do any of them guarantee repayment of capital from the VOLition Fund or the creditworthiness of any Counterparty.

5.3.3. The Responsible Entity

The Responsible Entity is the responsible entity of the VOLition Fund and has obligations under the Corporations Act, the VOLition Fund Constitution and general law.

Under the Corporations Act, if Investors wish to remove the Responsible Entity as the responsible entity of the

VOLition Fund they can have a meeting convened to consider an extraordinary resolution (which requires 50% by value of votes able to be cast to be voted in favour of the resolution) to replace it. Similarly, if the Responsible Entity wishes to retire as responsible entity of the VOLition Fund then it must call a meeting of members to explain its reasons and enable members to vote on an extraordinary resolution to choose a new responsible entity. If no company which is suitably licensed and which has consented to be appointed is chosen by members, then the Responsible Entity can apply to the Court for the appointment of a temporary responsible entity. Within three months (or such longer period allowed by the Court) any temporary responsible entity is to call a meeting of members to choose a new responsible entity. If no new responsible entity is appointed then application is to be made to the Court for an order to wind up the VOLition Fund. There is no assurance that another entity would be willing to act as responsible entity or at the fees currently payable to the Responsible Entity. Any fee increase could adversely affect Investor’s returns.

5.4. Variable participation risk

The Value of the Index Contract depends upon the daily performance of the Index and the level of participation in that performance. Allowing participation to be above 100% and as high as 150%, like leverage, has the potential to magnify any poor performance of the Index. The level of participation in the daily gains and losses of the Index is readjusted daily depending on the preceding 60 Trading Day Volatility (refer to Section 4.2 of this PDS for further information).

Due to the varying level of participation in the daily gains and losses of the Index, the level of the Adjusted Index (from which any Deliverable payable at Maturity is calculated) on any given day will be unlikely to exactly reflect the value of any increase or decrease in the Index from the Unit Issue Date. In some circumstances, the Variable Participation Methodology can negatively affect the level of the Adjusted Index when compared with the performance of the Index:

(a) Example 1: Where positive performance of the Index is accompanied by high levels of Volatility, the Variable Participation Methodology can cause the Index Contract to not participate in any gain in the Index on any given day. Consider the Participation Rates depicted in Table 2 and an investment worth $100,000 on a given day. Assume the Index gained 5% by the following day. The Volatility for the Index for the preceding 60 Trading Day period during the same period was 45%. Based on this Volatility, the Participation Rate applicable to this period would be 0%.

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This means that the 5% gain in the Index would have caused no corresponding gain in the Adjusted Index. In other words, the $100,000 investment would still now be worth $100,000 compared with a direct investment in the Index which would now be worth $105,000.

(b) Example 2: Where negative performance of the Index is accompanied by low levels of Volatility, the Variable Participation Methodology may magnify the losses under the Index Contract on any particular day. Again, consider the Participation Rates depicted in Table 2 and an investment worth $100,000 on a given day. Assume the Index fell by 5% by the following day. The Volatility for the Index for the preceding 60 Trading Day period during the same period was 8%. Based on this Volatility, the Participation Rate applicable to this period would be 150%. This means that the 5% fall in the Index would have caused a corresponding 7.5% fall in the Adjusted Index. In other words, the $100,000 investment is now worth $92,500 compared with a direct investment in the Index which would now be worth $95,000.

(c) Example 3: Given Volatility is based on the preceding 60 Trading Day Volatility, the Variable Participation Methodology may cause a lag in the Index Contract participating in any gain in the Index. This can occur in a situation where a gain is preceded by an extended period of high levels of Volatility. Conversely, the Variable Participation Methodology can also cause a lag in the Index Contract not participating in any loss seen in the Index where that loss is preceded by an extended period of low Volatility. Following on from Example 2 above, assume the Index continued to fall each day for the next two week period. Because the Volatility is based on the preceding 60 Trading Day Volatility, the Volatility would need to increase to over 18% for the Units to have less than a 100% Participation Rate in the continuing losses. This would only be seen where the level of volatility in the market increased significantly over this period also.

5.5. Cash Investment risk

As each of the VOLition Fund Series will invest in notes or like investments, the value of, and returns from, an investment in the Series will depend on the returns from the relevant Cash Investments held. These returns will be affected by prevailing interest rates and the creditworthiness of the provider of the investments. The Responsible Entity intends to acquire (at least initially) unsecured notes issued by Macquarie Group Limited. A description of Macquarie Group Limited can be found in Sections 5.3.1 and 9.1.2 of this PDS.

5.6. Deliverable risks

The Index Contracts entered into by the Responsible Entity for a Series include provision for cash payments to the Responsible Entity (or delivery of securities) by the Contract Counterparty based on the daily performance of the Adjusted Index (above a Threshold) determined for Maturity.

Accordingly, the VOLition Fund may receive cash as a Deliverable or the equivalent value in Deliverable Securities (if the Responsible Entity requests that all or part of the Deliverable be in the form of securities).

For Investors who elect to redeem at Maturity, the cash value equivalent of any securities received by the Responsible Entity as Deliverables will (to the extent relevant to their Series) be taken into account in determining the Redemption Price for their Units. For Investors who remain invested in the VOLition Fund, the Responsible Entity may hold any relevant Deliverable Securities (to the extent received as Deliverables or as may subsequently be acquired including by virtue of reinvestment of distributions from the relevant Deliverable Securities). Accordingly, Investors who remain invested after the Maturity will be exposed to any movement in the value of the Deliverable Securities held by the Responsible Entity that forms part of the Pool for any Series in which the Investor holds Units.

As any Deliverable Securities held may need to be redeemed or otherwise sold to raise funds to meet redemptions, Investors also take risk on the liquidity of those Deliverable Securities.

5.7. Extraordinary Event risk

If an Extraordinary Event occurs in relation to an Index Contract, the identity of the relevant Index, the determination of the daily Index level or the premium payable under the Index Contract by the Responsible Entity may be affected. Additionally, the occurrence of an Extraordinary Event may also result in an Index Contract terminating before Maturity. These events may affect the VOLition Fund’s return from the Index Contract and accordingly the return on your investment. See section 4.4 and Appendix A.3 of this PDS.

5.8. Withdrawal and Liquidity

You should have the intention to hold your investment in the relevant Series of the VOLition Fund until at least the Series’ Maturity.

Units in the VOLition Fund will not be listed on the ASX or any other stock exchange, and as such are not as liquid as some other investments. The Responsible Entity also has discretion whether to accept or reject any transfer of Units in the VOLition Fund, so there is no assurance that transfers will be

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possible. If the transfer may adversely affect the Trust or Series it will not be permitted.

You may apply to the Responsible Entity to redeem your Units in a VOLition Fund Series prior to the Series Maturity in accordance with the redemption provisions summarised in Section 3.3 of this PDS. However, the Responsible Entity has discretion whether to accept or reject a redemption request other than a Maturity Redemption Request.

If a redemption request is accepted then there may be a time delay between when a redemption request is accepted and when you receive the proceeds from the redemption. The Responsible Entity has up to 2 months after acceptance of a redemption request to provide Investors with the proceeds of redemption but will endeavour to pay these as soon as practicable.

In the event you are able to redeem your investment prior to Maturity, there is a risk your investment may be worth less than your initial investment in the VOLition Fund. In particular please refer to Sections 2.4 and 2.5, and Appendix A.2 and A.3, in relation to the Cash Investments and Index Contracts as well as the other parts of this Section 5 for risks associated with them.

If the redemption is being made after Maturity, there may be delays in the Responsible Entity’s ability to realise its investment in any Deliverable Securities which it received at Maturity as part of any Deliverable under an Index Contract or which it acquired after Maturity. This may result in a delay in the Responsible Entity having sufficient cash funds to pay your redemption proceeds.

Please note that 20% of the unsecured notes (by face value) to be issued by Macquarie Group Limited and held by the Responsible Entity as the initial Cash Investments for each Series will be redeemable before Maturity. This means that for any particular Series, the Responsible Entity will only be able to realise a limited amount of its Cash Investments to fund any redemption requests before Maturity. Once 20% of the Cash Investments held by the Responsible Entity for a given Series have been redeemed, there is no certainty that any further redemptions of Cash Investments will be possible prior to Maturity for that Series and accordingly there is no certainty that the Responsible Entity will be able to realise sufficient cash to meet redemption requests from Investors in the relevant VOLition Fund Series. Accordingly, in considering whether or not to invest in a VOLition Fund Series you should be prepared to remain invested in that Series until at least Maturity, as you may not be able to redeem prior to Maturity.

5.9. Taxation

You should refer to Section 7 of this PDS for information on the taxation consequences of an investment in a VOLition Fund Series. The information provided in this PDS is not advice to any prospective investor in the VOLition Fund. Investors should seek their own independent advice, which takes into account their own particular circumstances, on the taxation consequences of investing in any VOLition Fund Series. The information pertaining to taxation in this PDS is based on the provisions of the Tax Act; announcements by and on behalf of the Commonwealth Government and the Commissioner of Taxation; and practice applicable, all as at the date of this PDS. Any of these may change in the future without notice and legislation introduced to give effect to announcements may contain provisions that are not currently contemplated.

Future changes in tax laws, or their interpretation, could affect the tax treatment of the VOLition Fund generally, any Series of the VOLition Fund and of Investors in the VOLition Fund or any Series.

You should note that the reinvestment of distributions is likely to result in you being subject to tax on amounts which you do not physically receive. As a result, any tax must be paid from sources other than your VOLition Fund investment.

5.10. Superannuation and trust law

All trustees (including trustees of superannuation funds) must comply with their duties under the trust instrument and general law as trustee. In particular, they need to have the power to enter into transactions. All Investors who are trustees should check that they have the power to make the investment as contemplated by this PDS.

In addition, trustees of superannuation funds should check that they comply with their obligations under the Superannuation Industry (Supervision) Act 1993 (Cth) and Superannuation Industry (Supervision) Regulations 1994 (Cth), and in particular their obligation to formulate and implement an appropriate investment strategy. Trustees should obtain their own advice in relation to these matters.

Failure to comply with these requirements could give rise to personal liability and penalties for the trustee.

5.11. Change of law

Changes in laws or their interpretation, including taxation and corporate regulatory laws, practice and policy could have a negative effect on the returns to Investors.

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SK Fees and other costs By law, prior to setting out the fees and other costs of the VOLition Fund, we are obliged to provide you with the following Consumer Advisory warning, which applies generally to managed funds investment products.

CONSUMER ADVISORY WARNING

DID YOU KNOW?

Small differences in both investment performance and fees and costs can have a substantial impact on your long term returns.

For example, total annual fees and costs of 2% of your fund balance rather than 1% could reduce your final return by up to 20% over a 30 year period (for example, reduce it from $100,000 to $80,000).

You should consider whether features such as superior investment performance or the provision of better member services justify higher fees and costs.

You may be able to negotiate to pay lower contribution fees and management costs where applicable. Ask the fund or your financial adviser.

TO FIND OUT MORE

If you would like to find out more, or see the impact of the fees based on your own circumstances, the Australian Securities and Investments Commission (ASIC) website (www.fido.asic.gov.au) has a managed investment fee

calculator to help you check out different fee options.

The table below shows fees and other costs (GST inclusive net of RITC where applicable) that you may be charged in relation to the VOLition Fund. These fees and costs may be deducted from your money, the returns on your investment or from the VOLition Fund assets as a whole. Information on taxes is set out in Section 7 of this PDS. You should read all of the information about fees and costs because it is important to understand their impact on your investment in the VOLition Fund.

6.1. All Significant Fees and Costs

Type of fee or cost Amount How and when this fee or cost is paid

Fees when your money moves in or out of the VOLition Fund

Establishment fee

The fee to open your investment.

Nil. You do not have to pay an establishment fee to invest in any Series of the VOLition Fund.

Not applicable.

Contribution fee

The fee on each amount contributed to your Investment

Not applicable. Not applicable.

Withdrawal fee

The fee for each amount you take out of your investment.

Before Maturity: $205 per redemption request for the same day for Series with the same Maturity.

At Maturity: nil.

After Maturity: $205 plus 0.5125% of the Redemption Price for the relevant Series per redemption request for the same day for Series with the same Maturity.

Any withdrawal fee and transaction costs are deducted from redemption proceeds before they are paid to an Investor.

Termination fee

The fee to close your Investment.


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Type of fee or cost Amount How and when this fee or cost is paid

Termination fee

The fee to close your Investment.


Management Costs

The fees and costs for managing your Investment.

Responsible Entity Fee: This is the cost for the Responsible Entity undertaking the role of responsible entity of the Scheme.

Expenses

An amount for each Series, being 0.50% per annum of the value of Cash Investments per Series until Maturity and thereafter up to 3.075% per annum of the value of Cash Investments per Series.

In addition, an amount of up to $660,000 is paid to the Responsible Entity for expenses incurred in establishing the VOLition Fund.

Fees will accrue daily and be calculated monthly (and where it is a percentage based on the value of the Cash Investments in each Series, the value at the end of each month) and paid at the end of each calendar quarter out of the assets of the VOLition Fund. Where possible fees calculated for a Series are allocated to the Series Pool and otherwise are allocated between the relevant Series Pools as described in Section 1 and Appendix A.1 of this PDS.

Expenses are paid from the assets of the VOLition Fund and allocated between the relevant Series Pools as described in Section 1 and Appendix A.1 of this PDS, as and when incurred with provision made for accruing expenses.

Expenses include (without limitation) costs and expenses connected with interest or other costs, tax, meetings of Investors, termination of a Series or the VOLition Fund and retirement or removal of the responsible entity, court proceedings or arbitration, or complying with any law or request of ASIC, accounting, audit and operating expenses.

Service fees

Investment switching fee

The fee for changing investment options.

Not applicable

(There is no right to switch between Series.)

Not applicable.

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Example of annual fees and costs

This table gives an example of how the fees and other costs for the VOLition Fund can affect your investment over a one year period. You should use this table to compare this product with other managed investment products.

Please note that amounts in the tables are for illustrative purposes and have been subjected to rounding. All amounts in the tables are inclusive of GST net of RITC.

Example BALANCE OF $50,000 WITH A CONTRIBUTION OF $5,000 DURING YEAR

Contribution Fees

Plus Management Costs

Nil

Up to 0.50% per annum of the value of the Cash Investments per Series until Maturity of the Series.

Up to 3.075% per annum of the value of the Cash Investments per Series after Maturity of the Series.

For every additional $5,000 you put in, you will be charged $0

And, for every $50,000 you have in the VOLition Fund you will be charged up to $250 each year (or up to $62.50 each quarter) until Maturity and $1,537.50 after Maturity

Equals Cost of the VOLition Fund

If you had an investment of $50,000 at the beginning of the year and you put in an additional $5,000 during that year, you would be charged fees:

Of up to $275.00 prior to Maturity.

Or $1,691.25 after Maturity of the Series

There is no ability to make additional contributions to a Series during a year, other than as a result of distribution reinvestment (see Section 3.10 of this PDS).

Additional fees may apply. If you exit/redeem from the VOLition Fund Series after Maturity of the Series the withdrawal fees payable are currently $205 plus 0.5125% of Redemption Price. (i.e. $461.25 for a $50,000 investment you withdraw).

In accordance with the requirements of the Corporations Act, the table is based on an additional investment of $5,000. However you should note that the additional investments will usually only be income reinvestment amounts which are unlikely to be exactly $5,000.

6.2. Additional Explanation of Fees and Costs

Exit/redemption fees

In addition to the exit fees referred to in the above table, the Investor must pay any costs (including any custodial fees) incurred in connection with the redemption of their Units to the extent that those costs are not fully recognised in the Redemption Price of the Units. The costs reduce the total amount received on redemption of Units and so the level of funds available in a Series Pool.

Fee Changes

The VOLition Fund Constitution provides that the Responsible Entity is entitled to be paid from the assets of the VOLition Fund an amount per Series of:

• before Maturity, up to 0.55% per annum (GST inclusive); and

• after Maturity, up to 3.3% per annum (GST inclusive),

of the gross asset value of each Series Pool as a management fee. The management costs for the Responsible Entity carrying out its role before Maturity are currently 0.50% per annum (GST inclusive net of RITC) of the Cash Investments per Series. The Responsible Entity reserves the right to vary this fee after 30 June 2010.

The Constitution provides that after Maturity of a Series, the Responsible Entity may charge an exit/redemption fee of $220 plus 3.3% (GST inclusive) of the Redemption Price for each Unit redeemed. The Responsible Entity reserves the right to increase the redemption fee at any time after Maturity up to the full amount permitted by the Constitution.

Before the Responsible Entity varies such fees it will give you 30 days prior notice.

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Lead Distributor Fees

The Responsible Entity may pay out of its own funds to an adviser appointed by the Responsible Entity as the lead distributor upfront fees for expenses incurred for acting as lead distributor of the VOLition Fund. The payments to the lead distributor will be up to $450,000 (GST exclusive).

Commissions

The Responsible Entity may pay out of its own funds trailing commissions of up to 0.30% per annum (GST inclusive net of RITC) of the value of the Cash Investments in each Series Pool.

If you invest AUD50,000 into the VOLition Fund, and the VOLition Fund invests $45,000 in Cash Investments, the Responsible Entity will pay your financial adviser $135 (including the net impact of GST) (that is, $45,000 x 0.30%) per annum as an ongoing commission.

Soft Dollar Benefits

The Responsible Entity may enter into arrangements with financial advisers to provide non-monetary benefits to brokers and financial advisers for instance where the Responsible Entity considers that the financial adviser has undertaken extensive marketing of the VOLition Fund. Examples of non-monetary benefits include conferences, professional development, accommodation or travel. These benefits may be provided in addition to, or instead of, commissions.

Interest on Application Monies

The Responsible Entity will hold any Application monies it receives from you before it issues your Units in a trust account until your Units in the relevant Series are issued. Any interest earned on the trust account will be retained by the Responsible Entity and will not be paid to Investors or form part of any Series Pool or the VOLition Fund.

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TK Taxation 7.1. Seeking independent advice

This section of the PDS only applies to Australian residents for tax purposes. It contains general taxation information only and does not purport to contain advice in relation to any particular Investor’s specific taxation treatment. Accordingly, you should seek your own professional advice (including, if you are not an Australian resident, on tax implications in Australia and in any relevant foreign jurisdiction) to determine the tax treatment applicable in your particular circumstances.

The information in this section of the PDS is based on the provisions of the Income Tax Assessment Act 1936 and the Income Tax Assessment Act 1997 (each, a “Tax Act”) as they are anticipated to be amended in light of proposed legislation before Parliament, announcements made by and on behalf of the Commonwealth Government and the Commissioner of Taxation and practice applicable, as at the date of this PDS. Any of these may change in the future without notice and final legislation passed to give effect to announcements may contain provisions that are not currently contemplated.

7.2. Taxable income of the VOLition Fund and treatment of trust losses

The Responsible Entity will distribute at least the taxable income of the VOLition Fund for tax purposes each year. The Responsible Entity expects that its gains and losses on the Cash Investments and, subject to the comments at section 7.9 below, its gains and losses on Index Contracts will be on revenue rather than capital account.

Assessable income or allowable deductions in respect of the Index Contracts will normally need to be recognised in the VOLition Fund only at or around the time of Maturity (or early termination of part of the Index Contract).

Assessable income on the Cash Investments will normally need to be recognised in the VOLition Fund progressively over the periods in which the Cash Investments are held, even though that income will normally be received in cash only around Maturity (or early termination of part of the Cash Investments).

The taxable income of the VOLition Fund will be computed on a whole of trust basis. This means that, if any Series would have a tax loss (computed as if it were a stand alone entity), the deductions giving rise to that notional tax loss will be used to reduce the assessable income of other Series. That is, those deductions will not be quarantined within the relevant Series for carry forward by that Series.

If the VOLition Fund has a revenue loss for a year, it will be able to carry forward that loss for offset against

taxable income in later years subject to satisfying the relevant trust loss tests. If the VOLition Fund has a capital loss, it will be able to carry forward that loss for offset against capital gains derived in later years.

7.3. Taxation of distributions

The Responsible Entity will distribute at least the taxable income of the VOLition Fund for tax purposes each year. You will be entitled to a distribution from the relevant Series Pool in the VOLition Fund in proportion to your holding of Units in the Series which relates to that Series Pool. You will be required to include your share of the taxable part of the distribution in your tax return, even though the distributions on Units in the VOLition Fund will be reinvested to acquire additional Units in the VOLition Fund. If and to the extent that the distribution is not assessable to you (i.e. it is tax-deferred), the cost base of your Units in the VOLition Fund will generally be reduced by that amount (or a capital gain may arise to the extent that the amount exceeds the cost base of a Unit).

Distributions from the VOLition Fund may be made up of a range of different components. The distributions could include interest, revenue gains (and possibly capital gains – see section 7.9 below), other income and non-assessable amounts. If all or part of the Index Contract is settled at Maturity by delivery of a Deliverable that is not cash or where the Responsible Entity purchases securities to be held after Maturity, the components of the subsequent distributions for investors who elect to retain their Units in the VOLition Fund will depend on the nature of the income and gains derived by the Series in respect of the Deliverable or securities. Those components could include capital gains, revenue gains, franked dividends and unfranked dividends. The ability of the VOLition Fund to pass on any franking credits attached to any franked dividend income will require it to meet the relevant tests of being a fixed trust, and such tests will need to be considered at that time.

7.4. Gains or losses on redemption or sale of Units

7.4.1. Redemption of Units

If you redeem your Units in the VOLition Fund, part of your redemption proceeds may be stipulated by the Responsible Entity to be a distribution of taxable income. The remaining portion of your redemption proceeds will determine the extent of your gain or loss on redemption.

If you are a trader in investments or otherwise hold your Units in the VOLition Fund on revenue account, your full gains or losses on redemption may be assessable or deductible to you. The comments

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which follow address the case where an investment in the VOLition Fund is held on capital account.

Where you hold your investment on capital account, your capital gains tax (“CGT”) result on redemption of your Units will generally be the difference between the portion of your redemption proceeds which are not stipulated to be a distribution of taxable income and the cost base of the Unit.

The cost base of a Unit will include:

• the amount you directly invested in the Unit; and

• any relevant incidental costs which can be included in the cost base.

In addition, the cost base of a Unit held in the VOLition Fund will be reduced by any tax-deferred distributions made to you in relation to those Units.

You may have different parcels of Units which were acquired at different times due to the reinvestment of distributions to acquire additional Units in the VOLition Fund. Where you redeem some (but not all) of your Units in the VOLition Fund, the Responsible Entity will redeem your parcels on a pro rata basis. This methodology will have an impact upon the calculation of your gain or loss.

If you are an individual and you realise a capital gain on redemption of Units which you have held on capital account for at least 12 months, you will only be required to include half the net gain (after deducting any capital losses from other sources) in your assessable income. If you held the Units for less than 12 months, the whole of the net gain (after deducting any capital losses from other sources) would need to be included in your assessable income.

Complying superannuation entities redeeming Units after holding them for at least 12 months will be required to include only two thirds of the net gains (after deducting any capital losses from other sources) in their assessable income. If complying superannuation entities held the Units for less than 12 months, the whole of the net gain (after deducting any capital losses from other sources) would need to be included in their assessable income.

Other Investors who hold their Units beneficially will be required to include the whole of the net gain (after deducting any capital losses from other sources) in their assessable income.

If you realise a capital loss, you will generally be able to deduct that capital loss from capital gains arising in that year or in subsequent years.

7.4.2. Sale of Units

You will also need to calculate your CGT result if you sell your Units in the VOLition Fund. The CGT result on a sale of a Unit will normally be the difference between

capital proceeds of disposal (usually the sale price) and the cost base of the Unit.

The cost base of a Unit will include:

• the amount you directly invested in the Unit; and

• any relevant incidental costs which can be included in the cost base.

In addition, the cost base of a Unit held in the VOLition Fund will be reduced by any tax-deferred distributions made to you in relation to those Units.

If you are an individual or a complying superannuation entity and you derive a CGT gain on the sale of a Unit which had been held for at least 12 months, you will need to consider whether you are entitled to any CGT discount. If you are, you will be required to include only half (if you are an individual) or two-thirds (if you are a complying superannuation entity) of the net gain (after deducting any available capital losses from the gross gain) in your assessable income.

If you are an individual or a complying superannuation entity and you held a Unit for less than 12 months, the whole of any net capital gain (after deducting any available capital losses) will need to be included in your assessable income. That will also be the case if you held your units beneficially and you are not an individual or complying superannuation entity, regardless of the length of the holding period.

7.5. Taxation of Financial Arrangements

The broad objective of the Tax Laws Amendment (Taxation of Financial Arrangements) Act 2009 (“TOFA”) is to tax certain financial arrangements on an accruals or marked to market basis. TOFA applies for income years commencing on or after 1 July 2010, but may apply to some taxpayers from 1 July 2009 if the taxpayer makes certain elections.

The TOFA rules will apply to certain financial arrangements entered into on or after the relevant start date, unless a taxpayer makes an election for the rules to apply to all relevant financial arrangements of the taxpayer regardless of when they were entered into. The Responsible Entity does not expect to make such an election. The Responsible Entity anticipates that the taxation treatment of any financial arrangements that may be entered into by it on or after 1 July 2010 will broadly be in line with the taxation treatment anticipated for those arrangements entered into prior to that date.

An investment in Units in the VOLition Fund should generally not be regarded in the Investor’s hands as a financial arrangement subject to the TOFA rules. However, Investors should seek their own advice on

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the potential impact of TOFA, if any, on their investment in the VOLition Fund.

7.6. Tax File Number

You are not required to provide your tax file number to the Responsible Entity. However, if you do not provide a tax file number or claim a valid exemption (or in certain circumstances provide an Australian Business Number), the Responsible Entity will be required to deduct tax from your distributions at the highest marginal tax rate plus Medicare levy (currently 46.5%).

To the extent that distribution reinvestment exceeds the after tax amount of the distribution, you will be required to fund the difference from your own sources. If you fail to make this payment, the Responsible Entity will redeem all of your Units and pay you the net proceeds.

7.7. GST

GST will not apply to the issue or redemption of Units in the VOLition Fund.

GST will apply to the fees charged to the VOLition Fund by the Responsible Entity and some other expenses of the VOLition Fund. The VOLition Fund will receive a reduced input tax credit equal to 75% of the GST paid in respect of certain of these expenses which will be allocated among the Series as described in section 1 and Appendix A.1 of this PDS.

7.8. Stamp duty

You should not have to pay stamp duty upon issue or redemption of your Units. However, if a transfer or like transaction with respect to your Units is agreed before

changes to stamp duty laws that are to occur on 1 July 2012, stamp duty is payable at the rate of 0.6% of the greater of the value of those Units and the sale price (if any) by the purchaser (or other person liable). Changes in the law mean that stamp duty on such transactions that occur on and after 1 July 2012 will not be payable. See section 6 of this PDS about restrictions that apply to transferring your Units.

7.9. Possible election for capital gains tax treatment for Managed Investment Trusts

On 12 May 2009, as part of the 2009-2010 Federal Budget, the Government indicated that it will allow Australian managed investment trusts (“MITs”), except those that are taxed like companies, to make an irrevocable election to apply the CGT regime as the primary code for taxing certain disposals of assets (primarily shares in a company, units in a unit trust and real property investments), with effect from the 2008-09 income year.

As at the date of this PDS, no legislation has yet been introduced. Once the legislation is introduced, the Responsible Entity will consider whether the VOLition Fund can elect into the regime and if so, whether it will elect into the regime.

Until the amending legislation is enacted, it is not possible to state with certainty whether or not the proposed amendments will apply to the VOLition Fund, or to the disposal of its assets.

Liability limited by a scheme approved under Professional Standards Legislation

PricewaterhouseCoopers

ABN 52 780 433 757

Darling Park Tower 2

201 Sussex StreetGPO BOX 2650

SYDNEY NSW 1171

DX 77 SydneyAustralia

Telephone +61 2 8266 0000

Facsimile +61 2 8266 9999www.pwc.com/au

The DirectorsMacquarie Alternative Assets Management LimitedNo. 1 Martin PlaceSYDNEY NSW 2000

3 June 2009

VOLition Fund

Dear Directors

In our opinion, Section 7 headed “Taxation” in the Product Disclosure Statement (PDS) dated on or

about 3 June 2009 to be issued by Macquarie Alternative Assets Management Limited as

Responsible Entity for the VOLition Fund (the Fund) is an appropriate summary of the main

Australian income tax and goods and services tax implications for an investor in units in the Fund

who holds their units on capital account. This opinion is based on Australian taxation laws in force

and administrative practices generally accepted, and on changes announced but not yet legislated,

as at the date of this letter.

The discussion contained in Section 7 “Taxation” of the PDS is of a general nature only, and does

not take into account the specific circumstances of any investor. All investors should seek their

own independent advice on the taxation implications of their investment in units in the Fund.

The information contained in this letter does not constitute “financial product advice” within the

meaning of the Corporations Act 2001 (Cth) (Corporations Act). The PricewaterhouseCoopers

partnership which is providing this letter is not licensed to provide financial product advice under

the Corporations Act. To the extent that this letter contains any information about a “financial

product” within the meaning of the Corporations Act, taxation is only one of the matters that must

be considered when making a decision about the relevant financial product.

(2)

This letter has been prepared for inclusion in the PDS, and does not take into account the

objectives, financial situation or needs of any recipient of the PDS. Accordingly, any recipient

should, before acting, consider taking advice from a person who is licensed to provide financial

product advice under the Corporations Act. Any recipient should, before acting, also consider the

appropriateness of this letter, the PDS and any other relevant materials having regard to the

objectives, financial situation and needs of themselves or their clients, and consider obtaining

independent financial advice.

Yours faithfully

N HealyPartner

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UK Reporting 8.1. Initial confirmations

If your Application to invest in a Series is accepted, as soon as reasonably practicable thereafter you will be sent an investment confirmation setting out the key terms of your investment.

8.2. Performance reports

Performance reports will be available on the VOLition Fund website at www.macquarie.com.au/volition at least annually showing:

• the number and value of your Units in a VOLition Fund Series at the reporting date; and

• the distributions (if any) from your VOLition Fund Series investments since the last performance report.

It is the intention these performance reports will be available within six weeks from the end of the reporting period.

In addition you can access the statement of the net values of the Series Pools at the VOLition Fund website at www.macquarie.com.au/volition which is updated at least quarterly.

8.3. Annual tax reports

Annual tax reports showing the taxable income from distributions (if any) on your investment for that financial year will be available on the VOLition Fund website.

You should not expect the annual tax report until three months after the end of the financial year.

8.4. Disclosing Entity

The VOLition Fund is expected to have more than 100 Investors and, while it does, it will be a disclosing entity for the purposes of the Corporations Act. As a disclosing entity, it will be subject to regular reporting and disclosure obligations and copies of documents lodged with ASIC in relation to them may be obtained from, or inspected at, an ASIC office.

You may obtain copies of the following documents by contacting the Responsible Entity on 1800 080 033:

• the annual financial report most recently lodged with ASIC by the Responsible Entity for the VOLition Fund;

• any half-year financial report lodged with ASIC by the Responsible Entity for the VOLition Fund after the lodgement of that annual financial report and before the date of this PDS; and

• any continuous disclosure notices given by the Responsible Entity in respect of the VOLition Fund after lodgement of that annual report and before the date of this PDS.

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VK Additional Information 9.1. Credentials

9.1.1 The Responsible Entity — Macquarie Alternative Assets Management Limited

Macquarie Alternative Assets Management Limited (“MAAML”) is the responsible entity of the Fund. MAAML is part of the Macquarie Group of companies and holds an Australian Financial Services Licence No. 225758 - which authorises it to act as the responsible entity of the VOLition Fund.

As the current responsible entity of the VOLition Fund, MAAML is responsible for managing the VOLition Fund in accordance with the Constitution and the Corporations Act but may appoint third parties to assist it in performing those functions.

9.1.2 Macquarie Group Limited

Macquarie Group Limited is a non-operating holding company and the ultimate listed parent for the Macquarie Group. Macquarie Group Limited is listed on the ASX (ticker MQG) and is regulated by APRA as a non-operating holding company of an authorised deposit-taking institution. Macquarie Group Limited will issue the notes comprising the initial Cash Investments of the VOLition Fund.

The Responsible Entity is a wholly owned subsidiary of Macquarie Group Limited. Further information about the Macquarie Group structure including the S&P credit rating and other financial information about Macquarie Group Limited is available on the Macquarie website at www.macquarie.com.au.

9.1.3 The Contract Counterparty

The Responsible Entity will enter into the Index Contracts with a third party. This third party (or third parties) is referred to in this PDS as the Contract Counterparty. See Sections 2 and 4 for more information on these arrangements.

The Responsible Entity intends to only enter into Index Contracts with a Contract Counterparty that has an S&P credit rating of at least A-, or are guaranteed by an entity that has an S&P credit rating of at least A-, at the Offer Close date. However please note this credit rating may change after the Offer Close date (including before the Index Contracts are entered into and/or throughout their term).

The Responsible Entity accepts no liability or responsibility for, and makes no representations

regarding the ability of the Contract Counterparty to perform its obligations in relation to the Index Contracts or in relation to the provision of the Deliverable (if any).

Investors must make their own assessment of the minimum S&P credit rating above, and in particular, must consider the acceptability of financial institutions with this minimum credit rating mentioned above before deciding to invest.

9.2. Macquarie conflicts of interest

All related party transactions entered into by the Responsible Entity are conducted on arm's length terms and any conflict of interest or potential conflict of interest is managed in accordance with the Responsible Entity's Conflict of Interest Policy.

It should be noted that:

• The Responsible Entity, Macquarie Bank Limited, and other members of Macquarie Group, or their directors, employees or affiliates may, subject to law, hold shares in any members of the Macquarie group of companies and units in the VOLition Fund.

• Directors and employees of the Responsible Entity and other members of the Macquarie group of companies may receive remuneration based on the performance of the VOLition Fund.

• The Responsible Entity, Macquarie Bank Limited, and other members of Macquarie Group of companies or their directors, employees or affiliates may buy and sell (whether as principal or agent) securities, commodity contracts or other financial products which form part of the Index or financial instruments linked thereto.

• Members of the Macquarie Group may have business relationships or alliances (including joint ventures) with companies whose stocks comprise or are included in the Index.

• Members of the Macquarie Group may from time to time engage in investment advisory or other activities for, or provide services to, any of the companies whose stocks comprise or are included in the Index in relation to matters unconnected with the VOLition Fund and which may or may not affect the value of the Units.

• Macquarie Group Limited will issue the notes comprising the initial Cash Investments of the VOLition Fund.

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In the future management of the VOLition Fund, the Responsible Entity may enter into other agreements with related parties which include entities in Macquarie Group or its associated companies.

9.3. Consents

Macquarie Group Limited has given and, at the date of this PDS has not withdrawn, its written consent to the inclusion of the statements made by it or based on statements made by it, in the form and context in which they appear in this PDS. Macquarie Group Limited have not authorised or caused the issue of this PDS or made any other statement included in this PDS (or any statement on which a statement in this PDS is based).

Standard & Poor’s (Australia) Pty Limited (S&P) has consented to the inclusion of the reference to S&P in Section 9.1.2 of this PDS in the form and context in which it is referred to. Except for that statement, S&P has had no involvement in the preparation of this PDS and makes no statement in this PDS or any statement on which a statement in this PDS is based. S&P has not caused or authorised the issue of this PDS. S&P, to the maximum extent permitted by law, expressly disclaim, and take no responsibility for any part of, this PDS, other than the reference to its name and the statements included in the PDS as specified above.

PricewaterhouseCoopers has given and, at the date of this PDS has not withdrawn, its written consent to the inclusion in this PDS of its Tax Report which is included in Section 7 headed “Taxation”, and to be named in this PDS in the form and context in which it is named.

9.4. Enquiries and Complaints

The Responsible Entity has procedures in place to consider and deal with enquiries and complaints within 45 days of receiving them. If you have any enquiries or complaints regarding the Responsible Entity you can contact the Responsible Entity on 1800 080 033 or you may write to:

Macquarie Alternative Assets Management Limited VOLition Fund R1723 Royal Exchange Sydney NSW 1225

MAAML is also a member of the Financial Ombudsman Service (“FOS”). If you are dissatisfied with its response to your complaint you may write to FOS at:

Financial Ombudsman Service GPO Box 3, Melbourne, Victoria 3001 Fax 03 9613 6399 Email [email protected] or call FOS on 1300 78 08 08.

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NMK Glossary When used in this PDS the following terms have the meanings referred to below.

Adjusted Index An index referable to the Index but taking into account cumulative daily Participation Rate adjusted gains or losses in the Index.

Applicant For a Series is a person or entity that makes an Application to invest.

Application An application to invest in a Series in the VOLition Fund.

Application Form An application for investment in one or more Series that is in the form attached to or accompanying this PDS. Copies of this PDS and accompanying Application Forms are also available with this PDS on the VOLition Fund website at www.macquarie.com.au/volition

Cash Investments Notes, bonds, deposits and like Cash Investments as described in Section 2.4 of this PDS.

Contract Counterparty

An entity with which the Responsible Entity enters into arrangements to obtain exposure to the Index under an Index Contract.

Cooling Off Period The period of 14 days commencing on the earlier of the date the issue of Units in the relevant Series of the VOLition Fund is confirmed to the Investor and the end of the fifth business day after the date of issue of the Units (as the case may be).

Corporations Act Corporations Act 2001 (Cth)

Counterparty The other party to a contract with the Responsible Entity.

Deliverable Under the Index Contract, the Deliverables will either be cash or the Deliverable Securities as described in Section 2.5 of this PDS.

Deliverable Securities

Ordinary fully paid ASX listed shares in the largest weighted security by market capitalisation in the Index on the Observation Date. See Section 2.5 of this PDS.

Eligible Applicant For a Series is an existing Macquarie Group client who the Responsible Entity is satisfied currently holds a Macquarie investment (if any) listed in section 1 of this PDS for that Series and is switching from that investment to that Series.

Extraordinary Event An event in relation to an Index Contract the occurrence of which may result in, amongst other consequences, changes to the identity of the Index or the way in which the Index is calculated or the termination of the Index Contract. See Section 4.4 and Appendix A.3 of this PDS for further details.

Financial Year The period from 1 July to the following 30 June (with the first financial year ending 30 June 2009)

Gross Asset Value For the VOLition Fund is the value of the total assets of the VOLition Fund without deduction of liabilities. For a Series is the value of the total assets of the VOLition Fund allocated to the Series’ Pool for that Series, without deduction of liabilities.

GST Goods and Services Tax

Index S&P/ASX 200 index (ASX Code: XJO and Bloomberg Ticker: AS51:IND.) (subject to any change as provided in the Index Contract – see Appendix A.3 of this PDS).

Index Contract A contract to be entered on the terms described in Sections 1, 2.5 and 4 of this PDS.

Investor A person who invests in Units.

Issue Date The date that a Unit is issued. See page 4 of this PDS for the anticipated Issue Date for Units.

Issue Price The price for which a Unit is issued. The Issue Price of the initial Units issued under this PDS being $1 and for future issues a price based on the Net Asset Value of the Series as described in Section 3.2 of this PDS.

MAAML Macquarie Alternative Assets Management Limited ABN 30 103 237 181

Maturity For a Series is the date specified in Section 2 of this PDS

Macquarie Bank Limited

Macquarie Bank Limited ABN 46 008 583 542

Macquarie or Macquarie Group

Macquarie Group Limited and its related bodies corporate.

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Macquarie Group Limited

Macquarie Group Limited ABN 94 122 169 279

Maturity Redemption Request

A request by an Investor for redemption of Units of a Series to be effected on or about Maturity of the Series (see Section 3.5 of this PDS).

Net Asset Value For the VOLition Fund is the value of the total assets of the VOLition Fund after deduction of liabilities.

For a Series is the value of the total assets of the VOLition Fund allocated to the Series Pool for that Series, after deduction of liabilities allocated to that Pool by the Responsible Entity.

Observation Date For a Series and an Index Contract means the date 10 business days before the relevant Maturity (subject to any change as provided in the Index Contract – see Appendix A.3 of this PDS).

Offer The invitation to you to apply for Units in one or more Series under this PDS.

Offer Close The date referred to in Section 1 of this PDS (as extended).

Participation Rate The varying level of participation (expressed as a percentage) in the daily gains and losses of the Index under the Index Contract determined applying the Variable Participation Methodology (see Section 4.2 of this PDS).

PDS This Product Disclosure Statement as it may be supplemented at any time

Pool For a Series is the pool of assets and liabilities of the VOLition Fund to which the Series is referable to determine Issue Price, Redemption Price, distributions and other entitlements. See Section 2 of this PDS.

Protected Value For a Series equals the Series Percentage of the amount initially invested in Units in that Series by Investors that have not been redeemed or otherwise cancelled.

It is used in relation to the Cash Investments as the amount of an investor’s initial investment in a Series that the Responsible Entity aims to protect at Maturity by investing in Cash Investments with the aim that those investments will grow to that protected amount by Maturity. The Cash Investments are described in Section 2.4 of this PDS. It is used in relation to the Index Contract as the amount of exposure (subject to the operation of the Variable Participation Methodology) to the performance of the Index.

Protected Value does not take into account reinvested distributions.

Redemption Price For redemption of Units in a Series is calculated on the basis of the Net Asset Value of the Series at the time of the redemption less any transaction costs as described in Section 3.3.4 of this PDS.

Responsible Entity The responsible entity of the VOLition Fund from time to time, the first responsible entity being MAAML.

RITC Reduced input tax credit

Series A class of Units in the VOLition Fund. The Series Offered under this PDS, being Series A, B, C and D.

Series Percentage A proportion of the amount initially invested in a Series by an Investor. This proportion is used to determine the Protected Value. The indicative Series Percentage for each Series is set out in Section 1 ‘Cash Investments’ of this PDS.

Tax Act The Income Tax Assessment Act 1936 ("1936 Act"), the Income Tax Assessment Act 1997 ("1997 Act") or both the 1936 Act and the 1997 Act, as appropriate.

Threshold A level above which the level of the Adjusted Index must rise for any amount to be provided as Deliverable at Maturity under the Index Contract for the Series

Units Units in the VOLition Fund Offered under this PDS.

Variable Participation Methodology

The management technique that varies the level of participation of a Series in the daily gains and losses of the Index through an Index Contract according to the level of Volatility in the Index over the preceding 60 ASX trading days as described in Sections 1 and 4 of this PDS.

Volatility The annualised volatility of the Index over a 60 trading day period. See Section 4 of this PDS.

VOLition Fund VOLition Fund ARSN 136 856 383

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Appendix A A.1 Constitution

The VOLition Fund is governed by a Constitution and general law. In addition to the information about the VOLition Fund included elsewhere in this PDS, the following refers to material provisions of the Constitution. You may obtain a copy of the VOLition Fund Constitution by contacting MAAML on 1800 080 033.

Assets held on trust: the Responsible Entity is to hold the VOLition Fund assets on trust for Investors and separately from all other assets held by the Responsible Entity.

Series Pools, Assets and Liabilities: The assets and liabilities of the VOLition Fund are to be divided into different Series Pools in the Responsible Entity’s books and the Responsible Entity must allocate each asset and liability of the trust to a particular Series Pool. The Responsible Entity will allocate assets and liabilities to the Series Pool to which they relate (with liabilities relating to assets being allocated in the same proportions as the assets are allocated to the relevant Pools or pro rata to relative Net Asset Value of the relevant Pools). The Responsible Entity will allocate assets or liabilities that do not relate to a particular Pool amongst all Series Pools on a basis that is pro rata to Net Asset Values of the relevant Pools to the extent possible without causing the Pool to have a net liability. As and when a net liability Pool for which liabilities have been reallocated to other Pools ceases to have net liabilities, the assets in excess of the liabilities of that Pool shall be reallocated amongst the Pools to which excess liabilities were reallocated and in the proportion which the excess Liabilities were reallocated.

Units and Issue: The beneficial interest in the trust is divided into Units. The Responsible Entity may issue Units and consolidate or divide them from time to time. Units are issued after 5pm on the later of the date that the Responsible Entity accepts the Investor’s application and the date that it receives the Issue Price for the Units in a form acceptable to it.

Transfer: Transfers of Units can only be made if permitted by the Responsible Entity. Transfers may be refused for any reason. The Responsible Entity may accept or reject any transfer of Units in its absolute discretion. Income to which an Investor is presently entitled when a transfer or transmission of Units is registered remains credited to the transferor.

Series of Units: Units are divided into classes called Series. Each Series of Units relates to a particular Series Pool. The distribution and other rights and entitlements of Units in a particular Series are determined by reference to the Series Pool which relates to that Series.

Application price for Units: The Issue Price for the first issue of Units of a Series at $1 per Unit and for all subsequent issues of Units is based on the prevailing net asset value of the Series Pool to which that Unit relates less transaction costs. The Issue Price may be rounded by up to 1%. Units issued against fund payments that are not subsequently cleared within 1 month of the issue of the Units, will be cancelled.

Application procedure: The procedure for application for Units is as determined by the Responsible Entity. Payment for the Units applied for can accompany an Application, be a reinvestment of distributions or be received before or after the application as the Responsible Entity permits and has set out in the relevant offer document or by notice to members.

Units may be issued pursuant to reinvestment of distributions without any action required of the Investor and Investors agree to accept any Units issued pursuant to distribution reinvestment.

Certificates: Certificates for Units are not required or intended to be issued.

Redemption Price of Units: The Redemption Price of Units of a particular Series is based on the prevailing net asset value of the Series Pool which relates to that Series less any transaction costs relating to the redemption.

Redemption procedures: Investors have no redemption right except at Maturity. At any other time an Investor may request redemption of their Units and the Responsible Entity may accept or reject a redemption request in its absolute discretion. If the Responsible Entity does not exercise this discretion within 3 months of receipt of a redemption request, it is treated as having rejected the redemption request. If a security interest is noted in the VOLition Fund register in respect of the Investor’s Units then the redemption will not be effected without the approval of the security interest holder noted in the register.

If the Manager accepts a Redemption Request, the Units the subject of that Redemption Request will be redeemed on a day which is not later than 6 months (or later as noted below) after that acceptance as stipulated by the Manager in its notice of acceptance and at the Redemption Price at the time of the redemption. Payment of the Redemption Price is to be made within 2 months of the redemption. Redemption requests once given may not be withdrawn. If the Responsible Entity has taken all reasonable steps to realise sufficient assets of the

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relevant Pool to satisfy a redemption request and is unable to do so due to one or more circumstances outside its control such as restricted or suspended trading in the market for an Asset or suspension or failure of a counterparty to make payment or other absence of any payment on an Asset, the period allowed for satisfaction of the redemption request may be extended by the number of days during which such circumstances subsist.

The Investor must pay all costs incurred by the Responsible Entity in respect of the VOLition Fund in connection with the redemption of their Units to the extent that those costs are not fully recognised in the Redemption Price of Units and such amounts may be deducted from the amount payable to the Investor in connection with the redemption. The Responsible Entity may redeem Units where the minimum investment requirements are not met by the Investor and without any action required of the Investor. It may also redeem Units where amounts are owed to the Responsible Entity. Redemptions in response to a Maturity Redemption Request are to be made within the period specified in this PDS (see Section 3.3.3 of this PDS).

If the VOLition Fund is not liquid then redemptions will only be effected as permitted by the Corporations Act (which requires that if any withdrawals are affected they are to be pursuant to ad hoc offers made by the Responsible Entity to the Investors). The Responsible Entity is not required to make offers of withdrawal in those circumstances.

The Redemption Price is not required to be met by the Responsible Entity out of its own funds.

Valuation of Assets and Liabilities: the Responsible Entity may have each Series Pool or the VOLition Fund valued at such times as it considers appropriate. It must have the assets valued at intervals appropriate to the nature of the VOLition Fund. Values are to be at market value determined in accordance with generally accepted practices for valuing assets of that type. Where there is no market value, the valuation methods and policies applied must be capable of resulting in a calculation of the Issue Price, Redemption Price or other amount that is independently verifiable.

Generally accepted accounting principles or accounting standards as generally accepted or in force immediately before 1 January 2005 (except as required in order to comply with Chapter 2M of the Corporations Act) are applied and there is exclusion from liabilities (including for the purpose of calculating issue and Redemption Prices of Units) of the amount which for accounting purposes is taken as representing Investors' capital, undistributed profits, and interest attributable to Investors.

Income and distribution to Investors: The VOLition Fund is to distribute all of the distributable income of the trust each year. The distributable income of each Series Pool must be calculated as if the Series Pool was a separate trust. Each Unit of a particular Series on issue on the record date for the distribution is entitled to an equal share of the distributable income of the Series Pool which relates to that Series of Units. Any losses within a Series Pool are to be apportioned across all other Series Pools based on the distributable income of the Series Pools. The Responsible Entity may require Investors to reinvest some or all of any distribution.

Payments: Payments may be made by the method that the Responsible Entity selects. Any cheques not presented within 6 months can be cancelled and proceeds reinvested in Series Units. The Responsible Entity may deduct from any payment due to an Investor any amount of tax or any amount that the Investor owes the Responsible Entity, Macquarie or any Macquarie Group company.

Powers of the Responsible Entity: the Responsible Entity has all powers in respect of the VOLition Fund that it is possible to confer on a trustee and as though it were the absolute owner of the assets and acting in its personal capacity. The Responsible Entity may invest in, dispose of and otherwise deal with property and rights (including derivatives) in its absolute discretion. The Responsible Entity must invest the Application price for Units in the Cash Investments and Index Contracts for a Series.

Retirement of manager: the Responsible Entity may retire by giving notice to Investors or otherwise as permitted by law (the Corporations Act requires a meeting of Investors - see section 5.3.3 of this PDS for further information about retirement). The Responsible Entity is released from all obligations in respect of the VOLition Fund after it retires.

Notices to Investors: Provision is made for how the Responsible Entity may communicate to Investors at the address noted in the register.

Notices to the manager: Investors may communicate to the Responsible Entity by giving notice which is signed and any notice is not effective until actually received.

Meetings of Investors: The Constitution establishes some rules for holding meetings of Investors – it provides that the quorum for a meeting of Investors is at least two Investors holding at least 10% of all Units entitled to vote on the resolution. These matters are subject to the Corporations Act meeting requirements.

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Rights and liabilities of the Responsible Entity: the Responsible Entity and its associates may hold Units in the VOLition Fund and it may deal with itself or an associate or Investor in any manner, and may be interested in any contract or transaction with itself or an associate or any Investor and retain for its own benefit any profits derived from such contract or transaction.

Limitation of liability and indemnity in favour of the Responsible Entity: Provision is made that the Responsible Entity is not liable to Investors for any loss suffered in relation to the trust except to the extent that the Corporations Act imposes such liability. It is also provided that the Responsible Entity’s liability to persons other than Investors is limited to the Responsible Entity’s ability to be indemnified out of the assets of the trust – it provides that the Responsible Entity is entitled to be indemnified out of the assets of the trust for any liability incurred in properly performing its powers and duties.

Liability of Investors: The Investor must indemnify the Responsible Entity if it is required to pay any tax as a result of a Investor’s action or inaction or as a result of an act or omission requested by the Investor or if it incurs any cost in relation to any payment in relation to the trust or any act or omission of the Investor.

Subject to other liabilities (which are summarised in this section of this PDS), the Constitution provides that the liability of an Investor is limited to the amount if any which remains unpaid on the Investor’s Units. Whether an Investor’s liability is limited in this way is subject to case law and the position is not certain.

Remuneration and expenses of manager: The Constitution provides that all expenses incurred by the Responsible Entity in relation to the proper performance of its duties in relation to the trust are payable or reimbursable out of the assets of the trust. It also provides that if the Responsible Entity is liable to pay GST in respect of any supply under or in connection with the Constitution, the Responsible Entity is entitled to be paid out of the assets of the trust an amount on account of GST. Each amount that the Responsible Entity receives as a rebate of any fee, commission or charge incurred in the acquisition, disposal or investment of the assets of the trust does not become an asset of the trust and is the sole property of the Responsible Entity in its own right. The Responsible Entity may redeem Units held by the Investor and use the redemption proceeds to satisfy any amount of money due to it by the Investor.

The VOLition Fund Constitution provides that the Responsible Entity is entitled to be paid an Application fee of up to 3% (GST exclusive) of the Application monies in respect of each Application for Units which it accepts (other than Applications pursuant to distribution reinvestment) (whether an Application fee is charged for the current Offer, and if so the amount, is set out in

section 6 of this PDS). It also provides that the Responsible Entity is entitled to be paid from the assets of the trust for each Series a fee of up to, up to Maturity, 0.5% p.a. (GST exclusive), and after Maturity, 3% p.a. (GST exclusive), of the gross value of the assets of the Series Pool for the Series accruing daily and calculated monthly based on the value of the assets on each month and payable from the assets on 30 June in each year (the current fee for acting as responsible entity is set out in section 6 of this PDS).

The VOLition Fund Constitution also provides that the Responsible Entity is entitled to an exit fee on withdrawals/redemptions from the trust of $200 (GST exclusive) for each redemption or withdrawal of Units up to Maturity, and after Maturity, $200 plus up to 3% (GST exclusive) of the Redemption Price. See section 6 of this PDS for further details on fees.

Duration of trust: The VOLition Fund commences when the first Unit issued. It terminates on the earliest of the 80th anniversary of the day before the trust commenced, the date specified by the Responsible Entity or the date the trust terminates under law.

Duration of a Series: Provides that a Series continues while the trust continues except where the Series is terminated earlier. A Series can be terminated by the Responsible Entity at any time on the date specified by the Responsible Entity as the date of termination of the Series in a notice given to Members; or the date determined by special resolution of the Investors holding Units in the Series; or after Maturity of the Series at the time at which the Series becomes less than the Minimum Series Size or the date on which the Net Asset Value of the Series Pool for the Series becomes zero or less.

Procedure on termination: The Constitution establishes the procedure for realisation of assets following termination and distributions on termination within 180 days as far as reasonably practicable and otherwise as soon as possible after that time. Net proceeds from the Series Pool are distributed pro rata to Investors in the Series.

Amendment to Constitution: The Constitution provides for amendment of its terms by special resolution of Investors or by the Responsible Entity if the amendment will not adversely affect Investors’ rights.

Compliance Committee: Provides that members of the Compliance Committee are entitled to be indemnified out of the assets of the trust for liabilities incurred in good faith while acting as members of the Compliance Committee.

Complaints: Establishes a procedure for the resolution of complaints – see section 9.4 of this PDS.

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Security interests: A mechanism applies for noting security interests on the register of Investors. It provides that where the Investor directs the Responsible Entity to pay distributions on Units to the holder of the security

interest noted on the register, the Responsible Entity must pay distributions to the security interest holder until notified by the security interest holder.

A.2 Cash Investments Agreements

The Responsible Entity will purchase unsecured notes issued by Macquarie Group Limited as the initial Cash Investments for each Series. The unsecured notes will be issued by Macquarie Group Limited out of its US$10bn Debt Instrument Programme.

Amount payable by the Responsible Entity for the unsecured notes: The Responsible Entity will purchase sufficient unsecured notes from Macquarie Group Limited for each Series so as to attempt to achieve the Responsible Entity’s objective for each Series holding Cash Investments at Maturity equal to the Protected Value of the amount initially invested in the Series by an Investor (subject to early redemptions).

Coupons on unsecured notes: The unsecured notes issued by Macquarie Group Limited will carry a coupon that is expected to be sufficient to cover the fees and expenses of the VOLition Fund, which means that interest is payable by Macquarie Group Limited during the term of the unsecured notes. In addition, the amount payable by Macquarie Group Limited on maturity of the unsecured notes is greater than the amount payable by the Responsible Entity for the issue of the unsecured notes. The amount payable on maturity of the unsecured notes is likely to reflect an interest rate on the amount the Responsible Entity pays to purchase the unsecured notes equal to an arms length commercial rate compounded annually, after taking into account the coupons paid. The purchase price and amount payable on Maturity for each note will be confirmed on the purchase of the note.

Redemptions: 20% (by face value) of the unsecured notes acquired by the Responsible Entity with the proceeds from any issue of Series Units under this PDS will be redeemable unsecured notes. This allows the Responsible Entity to redeem those unsecured notes to meet some redemption requests for each Series prior to Maturity. Once those unsecured notes have been redeemed for a given Series, the remaining unsecured notes for the Series will not be redeemable by the Responsible Entity prior to Maturity for that Series. Redeemable unsecured notes can be redeemed by the Responsible Entity at its election at the end of a quarter on 7 days notice.

The amount payable on redemption of unsecured notes before Maturity is an amount calculated to reflect the present value of the face value of the portion of the unsecured notes being redeemed, taking into account the remaining time to Maturity and the prevailing interest

rates at the time of redemption. Break costs may also be deducted from the amount payable by Macquarie Group Limited to the Responsible Entity for redemption of unsecured notes prior to Maturity. Accordingly, if you redeem your Units in a Series before Maturity, the amount payable to you will take into account the break costs payable to Macquarie Group Limited.

Events of Default: If an “event of default” occurs under the unsecured notes, the Responsible Entity may in certain circumstances give notice to Macquarie Group Limited requiring repayment of the unsecured notes. The following are examples of events of default:

• Macquarie Group Limited fails to pay any amounts due under the unsecured notes or fails to comply with other obligations under the unsecured notes (and fails to remedy the default within the set cure periods);

• it becomes unlawful for Macquarie Group Limited to comply with one or more of its obligations under the unsecured notes;

• financial indebtedness of Macquarie Group Limited that in aggregate exceeds 3% of its shareholder equity is not paid when due (after applicable cure periods) or becomes repayable before scheduled maturity as a result of a default by Macquarie Group Limited; or

• Macquarie Group Limited becomes insolvent or has a receiver, administrator, liquidator or other officer appointed to any of its assets.

Similarly, if at any time Macquarie Group Limited must pay to a government agency any amount for or on account of taxes, duties, assessments or other government charges (in addition to the amounts payable to the Responsible Entity under the unsecured notes) (“taxation event”), Macquarie Group Limited may give notice to the Responsible Entity redeeming all of the unsecured notes.

If the Responsible Entity (as a result of an event of default) or Macquarie Group Limited (as a result of a taxation event) elects to redeem the unsecured notes, Macquarie Group Limited must pay to the Responsible Entity an amount equal to the market value of the redeemed unsecured notes less the cost to Macquarie Group Limited in unwinding any related hedging arrangements that it has in place.

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A.3 Index Contracts

The Responsible Entity will enter into an Index Contract with the Contract Counterparty in relation to each Series. The final terms of the Index Contracts will be agreed between the Responsible Entity and the Contract Counterparty on a commercial arm’s length basis. The following is a summary of the proposed terms of an Index Contract.

Premium payable by the Responsible Entity The Responsible Entity must pay to the Contract Counterparty a “premium” for entering into the Index Contract. The amount of the premium is a portion of the notional amount of the exposure to the Index that the Index Contract provides and will be determined on entering into the Index Contract on an arms’ length commercial basis taking into account the overall arrangements.

Payment of a Deliverable Under the terms of each Index Contract, the Contract Counterparty is required on or about Maturity to pay an amount in either cash or securities to the Responsible Entity if the level of the “Adjusted Index” is, as at the Observation Date, greater than the applicable Threshold.

The value of the Deliverable (if any) payable by the Contract Counterparty to the Responsible Entity on or about Maturity is equal to the notional amount of the exposure to the Index under the Index Contract multiplied by the amount that the Adjusted Index exceeds the Threshold as a proportion of the Index level at the commencement of the Index Contract.

Sections 2.5 and 4 of this PDS provide examples of how the value of the Deliverable is calculated.

Adjusted Index

The level of the Adjusted Index at the commencement of the Index Contract is the same as the level of the Index. The Index Contract then provides for participation in a portion of the daily gains and losses of the Index. The portion of the gains or losses in which the Index Contract participates is known as the Participation Rate. The higher the Participation Rate, the higher the proportion of the daily gains and losses of the Index that the Index Contract participates in. The lower the Participation Rate, the lower the proportion of the daily gains and losses of the Index in which the Responsible Entity participates under the Index Contract.

The Participation Rate is determined by reference to the annualised Volatility of the Index over the previous 60 trading days. The higher the level of measured Volatility, the lower the Participation Rate. The lower the level of measured Volatility, the higher the Participation Rate. This determination of the Participation Rate based on the Volatility of the Index is known as the Variable Participation

Methodology. Section 4 of this PDS sets out the indicative Participation Rates based on the measured Volatility.

The Adjusted Index will change from day to day based on the gains or losses of the Index and the Adjusted Index’s participation in those gains or losses. Accordingly, whilst the starting Adjusted Index level is the same as the starting Index level, over time, the day to day Adjusted Index level will not reflect the day to day Index level (as the Adjusted Index level is increased or decreased by a proportion – which may be more or less than 100% - of the percentage that Index level increases or decreases each day).

Section 4 of this PDS provides examples of how the Adjusted Index level for a day changes based on the level of the gain or loss in the Index for that day and the Participation Rate for that day.

Notional amount of exposure to the Index

Each Index Contract provides Investors in the Series with exposure to the volatility adjusted movements in the Index (that is, the movements in the Adjusted Index) in an amount equal to the Series Percentage of the amount initially invested in the Series. The amount of this exposure for an Investor is adjusted during the term of the Index Contract to the extent that the Investor redeems Units in the Series before Maturity (which is the time for payment of any Deliverable and the time that the Index Contract ends).

Threshold

The Threshold for a Series is a fixed percentage of the starting Index level. The Adjusted Index must rise above the Threshold before a gain is deliverable at Maturity. The Threshold will be determined before the Index Contract commences. The Threshold will be at least 100% of the starting Index level and is anticipated to be up to 115% (but may be higher).

Observation Date

The Observation Date is the date 10 business days before Maturity for the Series. The Observation Date under an Index Contract may change as a result of a “disruption event”. A “disruption event” would usually occur where, during the last hour of trading on the relevant Observation Date, there are particular disruptions in the ability of market participants to trade in or get prices for 20% of more of the securities that make up the Index (including as a result of ASX imposed suspensions) or trading on the ASX closes prior to its scheduled time (without certain prior notice being given). Where this occurs, the Observation Date will instead be the next trading day on which a “disruption event” does

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not occur.

Type of Deliverable and date for payment

The amount of the Deliverable (if any) payable to the Responsible Entity on or about Maturity will be paid in the form of cash. However, the Responsible Entity may request that all or part of a Deliverable be paid in the form of Deliverable Securities.

Any Deliverable in the form of cash is payable 5 business days prior to Maturity.

Any Deliverable payable in the form of Deliverable Securities (being ordinary fully paid ASX listed shares in the largest weighted security by market capitalisation in the Index on the Observation Date) will be deliverable the day after Maturity. For the purpose of determining the number of Deliverable Securities to be delivered, the value of the Deliverable Securities will be deemed to be the closing price of the Deliverable Securities on Maturity.

Redemptions before Maturity of a Series and partial early termination of a contract

If an Investor in a Series has their Units redeemed prior to the Series’ Maturity, the Index Contract will be partially terminated by the Responsible Entity. A portion of the Index Contract (equal to the proportion of Units being redeemed in the Series relative to the aggregate number of all Units on issue in the Series) will be terminated and that portion of the Index Contract will then be valued by the Contract Counterparty.

If the terminated portion of the contract has zero value for both the Contract Counterparty and the Responsible Entity then no termination payment is required to be made.

If the terminated portion of the contract has a positive value for the Responsible Entity, then the Contract Counterparty will be required to pay to the Responsible Entity an amount equal to the value of the portion of the contract terminated

The amount payable to the Responsible Entity on this early termination may not equate to the Responsible Entity’s valuation of that portion of the Index Contract prior to the early termination occurring. Accordingly, the Redemption Price payable to the redeeming investor may be less than the latest value of the investor’s Unit published by the Responsible Entity.

The Contract Counterparty will determine the value of the Index Contract for the purposes of determining the amount payable on early termination of a proportion of the Index Contract. In determining the value of the Index Contract, the Contract Counterparty will take into account, amongst other things, the level of the Adjusted Index, the time remaining to Maturity and the Volatility of the Index.

Extraordinary Events

Events, known as “Extraordinary Events” may have an affect on the Index Contract. The final events that constitute Extraordinary Events (and the effect of those events) will be agreed between the Responsible Entity and the Contract Counterparty but may include events similar to the following events:

• The Index being replaced with similar substitute index or being cancelled without a substitute index existing

• Material changes in the formula or method of calculating the level of the Index

• Failure by the ASX to publish the level of the Index on any trading day.

• The Contract Counterparty being unable, after using commercially reasonable efforts, to hedge its risks in relation to the Index Contract.

• Adoption of a new law, change of an existing law or change in the interpretation of a law that would result in it becoming illegal for the Contract Counterparty to hold, acquire or dispose of any hedge of the Index Contract.

• The Contract Counterparty’s cost of hedging its risks under the Index Contract being materially increased compared to at the Issue Date (unless the increased cost has resulted from a deterioration in the Contract Counterparty’s creditworthiness).

If an Extraordinary Event occurs, one of the following consequences may result (in some cases at the election of the Contract Counterparty or the Responsible Entity).

• The index under the Index Contract may be substituted for another index.

• The Index level may be determined by the Contract Counterparty (instead of using the published Index level if any).

• The Index Contract may be terminated.

If the Index Contract is terminated as a result of an Extraordinary Event, the Index Contract will be valued and if positive, such value will be paid to the Responsible Entity.

Other termination rights

In addition, the Responsible Entity and the Contract Counterparty each have the right to terminate the Index Contract on the occurrence of specified events. These events include (amongst others):

• the other party to the contract becoming insolvent or having a similar event occur in relation to that party (including a reconstruction for the benefit of creditors);

• the other party failing to make a payment under the Index Contract when the payment is due to be made (after notice of the default has been given and a period of time allowed for the default to be remedied); and

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• a representation made by the other party being incorrect or misleading.

If the Responsible Entity or the Contract Counterparty terminates the Index Contract as a result of one of these events, the Index Contract will be valued by the terminating party.

As a result, if the terminated contract has zero value for both the Contract Counterparty and the Responsible Entity, then no payment will be made.

If the terminated contract has a positive value for the Responsible Entity, then the Contract Counterparty will be

required to pay to the Responsible Entity an amount equal to the value of the terminated contract.

The above summary assumes that the Responsible Entity will have paid all option premiums under the Index Contracts as and when they are due.

Contract Counterparty

A Contract Counterparty will not be entitled to novate the contract to a third party without the Responsible Entity’s prior consent.

A.4 The Compliance Plan

The VOLition Fund has a Compliance Plan that describes the measures that MAAML will apply in operating the VOLition Fund to ensure compliance with the Corporations Act and the VOLition Fund Constitution.

A Compliance Committee with a majority of independent members has been established by MAAML to monitor compliance with the Compliance Plan, the Constitution and the Corporations Act.

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Appendix B

Direct Debit Service Agreement Between the Investor and MAAML.

1. Definitions

The following definitions apply in this agreement.

“Account” means the account held at Your Financial Institution from which We are authorised and able to arrange for funds to be debited.

“Agreement” means this Direct Debit Service Agreement between You and Us.

“Business Day” means a day other than a Saturday or a Sunday or a national public holiday.

“Constitution” means the constitution of VOLition.

“Debit Day” means the day that payment by You to Us is due.

“Debit Payment” means a particular transaction where a debit is made.

“Direct Debit and Credit Request” means the debit authority You provide to Us in the Application Form attached to the PDS or that You otherwise provide to Us (which may but need not include a credit authority).

“Our, Us or We” means Macquarie Alternative Assets Management Limited ABN 30 103 237 181 (“MAAML”).

“PDS” means the document to which this Agreement was attached and which sets out the terms of the offer of Units in Series of VOLition.

“Series” means a class of Units.

“VOLition” means VOLition Fund ARSN136 856 383.

“You or Your” means the person(s) who signed the Direct Debit and Credit Request.

“Your Financial Institution” is the financial institution where You hold the Account that You have authorised Us to arrange to debit.

2. Debiting your Account

2.1 By signing a Direct Debit and Credit Request, You have authorised Us to arrange for funds to be debited from Your Account. You should refer to the Direct Debit and Credit Request, this Agreement and the Constitution for the terms of the arrangement between Us and You.

2.2 We will only arrange for funds to be debited from Your Account as authorised in the Direct Debit and Credit Request.

2.3 If the Debit Day falls on a day that is not a

Business Day, We may direct Your Financial Institution to debit Your Account on the preceding Business Day.

2.4 If You are unsure about when the Debit Payment will be or has been debited to Your Account, please check with Your Financial Institution.

3. Changes by Us

3.1 We may vary any details of this Agreement or a Direct Debit and Credit Request at any time by giving You at least fourteen days written notice.

4. Changes by You

4.1 Subject to clause 4.3, You may change the arrangements under a Direct Debit and Credit Request by contacting Us.

4.2 If You request Us to stop or defer a Debit Payment You must notify Us in writing at least three Business Days before the next Debit Day. We will notify You if Your request to stop or defer a Debit Payment has been approved.

4.3 Before You can cancel Your Direct Debit and Credit Request, You must notify Us and make other direct debit arrangements. The terms and conditions which refer to payments under the Constitution provide (amongst other things) that all moneys payable by You under the Constitution shall be paid by direct debit from an account at a bank or financial institution acceptable to Us, unless otherwise agreed by Us. If You cancel Your authority for Us to debit Your Account and do not make alternate arrangements regarding establishing another Direct Debit and Credit Request, then You may be in default under the Constitution.

5. Your obligations

5.1 Direct debiting may not be available on all accounts. You should check Your Account details against a recent statement from Your Financial Institution and, if uncertain, contact Your Financial Institution before completing the Direct Debit and Credit Request.

5.2 It is Your responsibility to ensure that there are sufficient clear funds available in Your Account by the Debit Day to allow a Debit Payment to be made in accordance with the Direct Debit and

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Credit Request.

5.3 If there are insufficient clear funds in Your Account to meet a Debit Payment:

a. You may be charged a fee and/or interest by Your Financial Institution;

b. You may also incur fees or charges imposed or incurred by Us as stated in the Constitution;

c. You may be in default under the Constitution; and

d. You must arrange for the particular Debit Payment (or agreed instalments of the funds) to be in Your Account by an agreed time or times so that We can process the Debit Payment failing which we shall be entitled to continue attempting to process the declined Debit Payment (or any instalment of the Debit Payment amount) periodically in such amounts to be determined until that declined Debit Payment has been processed in full.

5.4 You should check Your Account statement to verify that the amounts debited for Your Account are correct.

5.5 If We are liable to pay goods and services tax (“GST”) on a supply made by Us in connection with this Agreement, then You agree to pay Us on demand an amount equal to the consideration payable for the supply multiplied by the prevailing GST rate.

6. Dispute

6.1 If You believe that there has been an error in debiting Your Account, You should notify Us directly and confirm that notice in writing with Us as soon as possible so that We can resolve Your query more quickly. All queries should be directed to Us in the first instance so that We can attempt to resolve the matter between Us and You.

6.2 If We conclude as a result of Our investigations that Your Account has been incorrectly debited We will respond to Your query by arrangement for Your Financial Institution to adjust Your Account accordingly. We will also notify You in writing of the amount by which Your Account has been adjusted.

6.3 If We conclude as a result of Our investigations that Your Account has not been incorrectly debited We will respond to Your query by providing You with reasons and any evidence for this finding.

6.4 If We cannot resolve Your query You can still refer it to Your Financial Institution which will obtain details from You of Your query and may lodge a claim on Your behalf.

6.5 Subject to conditions and warranties implied by legislation and to any express terms in this Agreement, We are not responsible or liable for any delay, interruption or error in processing or failing to process any Direct Debit and Credit Request whether or not caused (including as a result of negligence) by Us, our employees or agents.

6.6 All terms implied by statute, general law or custom shall not apply to this Agreement except ones that may not be excluded. If We breach any condition or warranty implied by legislation in a contract with a consumer, Our liability for that breach is limited to a resupply of the services in respect of which the breach occurred, and We shall not be liable in any event for indirect or consequential loss or any loss of profits.

7. Confidentiality

7.1 We will keep any information (including Your Account details) in Your Direct Debit and Credit Request confidential. We will make reasonable efforts to keep any such information that We have about You secure and to ensure that any of Our employees or agents who have access to information about You do not make any unauthorised use, modification, reproduction or disclosure of that information.

7.2 We will only disclose information that We have about You:

a. to the extent specifically required by law; or

b. for the purposes of, or in connection with the exercise of any of Our rights and/or powers under, this Agreement, or the Constitution or otherwise in respect of your investment in VOLition (including disclosing information in connection with any query or claim).

8. Notice

8.1 If You wish to notify Us in writing about anything relating to this Agreement, You should write to Your Account manager.

8.2 We will notify You by sending a notice in the ordinary post to the address You have given Us in the Application Form attached to the PDS.

8.3 Any notice will be deemed to have been received two Business Days after it is posted. Execution by You of the Direct Debit and Credit Request deems You to have read and understood the terms of this Direct Debit Service Agreement.

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NNK How to Apply 11.1. Am I Eligible to Invest?

You are only an Eligible Applicant for a Series if you hold or are switching from the Macquarie Group product (if any) listed in section 2.2 of this PDS.

Please note that when you hold Units in a Series, there is no right to switch from that Series to another Series in the VOLition Fund.

11.2. What amount do I need to get started?

The amount of money you need to start an investment in a VOLition Fund Series under this Offer is a minimum of $10,000.

11.3. How to complete the Application Form

If you wish to apply to invest in Units in one or more Series of the VOLition Fund please complete the Application Form attached to or accompanying this PDS in accordance with the following instructions.

All Applicants ⎯ Read and complete parts 1A and 1B (if applicable), 3, 4, 5 and 8 of the Application Form.

⎯ Read parts 2 and 6 of the Application Form. ⎯ Read and sign part 7 of the Application Form.

And either:

Joint Applicants Also read and complete part 1B of the Application Form.

Corporate Applicants (including corporate trustee Applicants)

Also read and complete part 1C of the Application Form.

Please have two Directors or a Director and Secretary, or if the company only has one Director, please have the Sole Director/Sole Secretary sign in part 7 of the Application Form.

Trustee Applicants Also read and complete part 1D of the Application Form.

If the Trustee of the trust is a corporate entity please also have two Directors or a Director and Secretary, or if the company only has one Director, please have the Sole Director/Sole Secretary sign in part 7 of the Application Form.

11.4. Anti-Money Laundering and Counter –Terrorism Financing Act 2006

In December 2006 the Australian Government introduced the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (“AML/CTF Act”), which requires reporting entities, such as financial advisers and product issuers, to conduct client identification and verification checks. Macquarie is required to comply with the AML/CTF Act.

Entering into this product can be done in one of two ways, depending on whether you are an Applicant investing via a licensed financial adviser or a direct Applicant.

If you are investing through a financial adviser, your identification and verification checks can be conducted by your financial adviser who will also complete the relevant identification form issued by Investment and Financial Services Association Limited and the Financial Planning Association of Australia (“IFSA/FPA Form”). These forms are available from www.macquarie.com.au/aml.

If you are entering into this product by applying directly to the Responsible Entity, please complete the Application Form that accompanies this PDS. Please also ensure that you provide all the required verification material as described in the Application Form.

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We may, from time to time, be required to contact you to request additional information for identification or verification purposes.

By applying for the Units in the VOLition Fund you agree to the following:

a) at the reasonable request of any Macquarie Group company (“Macquarie”), to supply, or procure the supply of, any documentation and other evidence and perform any acts to enable Macquarie to comply with any laws relating to the AML/CTF Act;

b) if Macquarie suspects that you are in breach of any laws relating to AML/CTF applicable in Australia or elsewhere, or Macquarie believes it is required to take action under any laws relating to the AML/CTF Act or any other applicable law in Australia or elsewhere, Macquarie may take any action it considers appropriate, including transferring your Units and refusing or ceasing to provide you with services, in order to comply with any laws relating to AML/CTF or any request of a relevant authority; and

c) Macquarie may in its absolute discretion, with or without notice to you, disclose or otherwise report the details of any transaction or activity, or proposed transaction or activity in relation to your Units (including any

personal information (as defined in the Privacy Act 1988 (Cth)) that you may have provided to Macquarie) to any reporting body authorised to accept reports under any laws relating to AML/CTF applicable in Australia or elsewhere.

11.5. How to submit your Application Form

Please submit your Application Form and any required accompanying documents in any of the following ways, provided that it is received before 3.00pm (Sydney time) on Tuesday 30 June 2009.

Please submit your application by mail to:

By mail VOLition Fund R1723 Royal Exchange Sydney NSW 1225

Please check the VOLition Fund website for all updates prior to or after the Issue Date for each VOLition Fund Series. Paper copies of updated information on the VOLition Fund website at www.macquarie.com.au/volition are available free of charge by contacting the Responsible Entity (its contact details are in the Directory at the back of this PDS).

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VOLITION FUND1

ADVISER/BROKER DETAILS

Please retain my existing adviser details

If you would like to change your adviser details, please contact MAAML on 1800 080 033.

1A | APPLICANT DETAILS (to be completed by all applicants)

Select one of the following options:

Individual Applicant (being at least 18 years old)

Director of Corporate Applicant (Also complete 1C)

Director of Corporate Trustee Applicant (Also complete 1C and 1D)

Individual Trustee Applicant (Also complete 1D)

Applicant DetailsApplicant Title MR MRS MISS MS DR OTHER

First Name Middle Name

Surname

Contact Details (at least one contact number must be provided, as follows):Work Number Home Number Fax Number Mobile Number

( ) ( ) ( )

Email address

Additional Details — This section is mandatory.

Are you an Australian resident for Tax Purposes? If NO, please specify your country of tax residence.

Yes No Country

Tax File Number Exemption Details Including Expiry Date (if applicable)

See Part 2 of this Application Form for the consequences of not providing your TFN or exemption.

VOLITION FUND ARSN 136 856 383

Application Form - Series A, B, C and D

To: Macquarie Alternative Assets Management Limited ABN 30 103 237 181 AFSL 225758 (“MAAML”)

This Application Form relates to a Product Disclosure Statement dated 3 June 2009 issued by MAAML for the Offer of the Series of Units in the VOLition Fund ARSN 136 856 383 referred to in Part 4 of this Application Form (“the PDS”). Terms defined in the PDS have the same meaning in this Application Form.

The PDS contains important information about investing in the VOLition Fund. Please read the PDS and do not invest unless you understand the VOLition Fund. You should consult your financial adviser about whether this investment is suitable for you taking into account your objectives, circumstances and needs.

Please complete this form using BLACK INK and print well within the boxes in CAPITAL LETTERS. Mark appropriate answer boxes with a cross (X). Start at the left of each box and leave a gap between words. Should you have any questions please call: 1800 080 033 between 8am and 6pm (AEST) Monday - Friday.

VOLITION FUND 2

1B | JOINT APPLICANT DETAILS (to be completed by joint applicant only. If there is no joint applicant, please proceed to part 1C)

Select one of the following options:

Joint Individual Applicant Joint Director (Also complete 1C) Joint Corporate Trustee Applicant (Also complete 1C and 1D)

Joint Trustee Applicant (Also complete 1D)

Joint Applicant DetailsJoint Applicant Title MR MRS MISS MS DR OTHER

First Name Middle Name

Surname

Contact Details (at least one contact number must be provided, as follows):Work Number Home Number Fax Number Mobile Number

( ) ( ) ( )

Email address

Additional Details — This section is mandatory.

Are you an Australian resident for tax purposes? If no, please specify your country of tax residence.

Yes No Country

Tax File Number Exemption Details Including Expiry Date (if applicable)


1C | CORPORATE APPLICANT DETAILS (If you are not a Corporate Applicant please proceed to part 1D)

Note that Corporate Applicants are encouraged to submit their applications earlier, by 23 June 2009 to ensure the application can be processed by the close date.

Select one of the following options: Corporate Applicant Corporate Trustee Applicant (Also complete 1D)

Company Name

ACN Company Type

Pty Ltd Ltd Other (please specify)

Contact Details (at least one contact number must be provided, as follows):

Contact Name

Work Number Home Number Fax Number Mobile Number

( ) ( ) ( )

ABN/ TFN Exemption Details Including Expiry Date (if applicable)


1D | TRUSTEE APPLICANT (If you are not a Trustee Applicant please proceed to part 2)

Full Name of Trust

Trustee Name (list all)

Contact Details (at least one contact number must be provided, as follows):

Contact Name

Work Number Home Number Fax Number Mobile Number

( ) ( ) ( )

ABN/ TFN Exemption Details Including Expiry Date (if applicable)


VOLITION FUND3

2 | TAX FILE NUMBER (to be read by all applicants)

You do not have to provide your Tax File Number (“TFN”). However, if you do not provide your TFN in 1A, 1B, 1C or 1D or a valid exemption (or in certain cases an Australian Business Number (“ABN”)), tax will be deducted from any income earned on an investment in the VOLition Fund at the highest marginal tax rate plus Medicare Levy and forwarded to the Australian Taxation Office. MAAML will usually require any distributions to be reinvested by applying those distributions to acquire further Units in the relevant Series. As you will not physically receive those distributions you will have to pay any tax on those distributions, from your other sources. If you fail to make this payment (for example if the direct debit request you provide to us below fails), your Units may be redeemed and you will be paid the net proceeds (if any). For more information about the use of TFNs contact your tax adviser or the Australian Taxation Office. If you are exempt from quoting your TFN you must indicate this or tax will be deducted from any distributions on an investment in the VOLition Fund. It is not an offence if you decide not to supply us with your TFN or ABN.

Collection of TFNs is authorised, and its use and disclosure are strictly regulated by the tax laws and Privacy Act.

If you quote your TFN in part 1A, 1B, 1C or 1D of this Application Form, you also authorise MAAML to disclose it to their nominee companies for purposes relating to the Series Units in the VOLition Fund. If you choose to provide these details, please complete part 1A, 1B, 1C or 1D of this Application Form as applicable depending on whether you are an individual, joint applicant, company, or trustee applicant.

3 | ONLINE SERVICES (to be completed by all applicants)

MACqUARIE ONLINE SERVICEMacquarie provides you with complete online client service. In order to gain access, you will require a Macquarie Access Code (MAC). Once you have your MAC, after the issue of Units you can access your investment and Loan details at www.macquarie.com.au/alternativeinvestments.

Do you already have a MAC? (You and your adviser will be automatically issued with a MAC, if you do not specify otherwise).

YES NO If YES, please specify

I do not want my adviser (including all employees and agents if your adviser is a partnership or company) to have viewing access to my account online.

4 | YOUR APPLICATION (to be completed by all applicants)

I / We wish to apply for the units in the Series selected below.

VOLition Fund Series Switching from Application Number (eg, DN1234567) Cross below to apply*

A - Mq Multi - S1 MQ Multi-Strategy Capital Protected Fund ARSN 115 880 352 - Series 1

B - Mq Multi - S2 MQ Multi-Strategy Capital Protected Fund ARSN 115 880 352 - Series 2

C - Mq Equity Income MQ Equity Enhanced Income Fund ARSN 119 029 186

D - Mq Geared Equity Income MQ Geared Equity Income Fund ARSN 124 648 504

* By selecting a Series, you will be applying ALL of your redemption proceeds from your current Macquarie investment to the corresponding Series. You cannot switch to a Series that does not correspond to your current Macquarie investment.

The minimum amount that you can invest in a series is $10,000 (unless otherwise approved by MAAML).

I confirm that I have invested in a Macquarie Group product before 12 December 2007. (If not, please contact MAAML on 1800 080 033 for AML/CTF identification.)

VOLITION FUND 4

5 | DIRECT DEBIT AND CREDIT REqUEST (to be completed by all applicants)

Important Notices:

Please note that:The nominated bank account must be in the name of the Applicant and will be used to credit any proceeds from redemption and/or to debit any withdrawal or �other fees due or any withholding tax to be paid for any distributions in the event you do not provide a Tax File Number.The bank account nominated below must be in the name of the Applicant. �If a joint bank account has been nominated below, all account holders must sign below. �If the bank account is a company account, and the company has more than one director, at least two directors must sign below. �

Bank Account Details

Branch Number (BSB) Account Number

Account Name (If joint account is being nominated, all account holders must sign below)

Name of Financial Institution

If withdrawal fees or any withholding tax is incurred or is payable in connection with my/our investment in the VOLition Fund, I/we, as signatories and the holders of the Bank Account nominated above, authorise and request you, Macquarie Alternative Assets Management Limited (“MAAML”) ABN 30 103 237 181 (User ID number 161381), until further notice in writing, to debit my/our account described above with any amounts which you may properly debit or charge me/us through the direct debit system.

I/We, as the signatories and the holders of the bank account nominated above, understand and acknowledge that:

By executing this Direct Debit/Credit Request, I/we have read and understood and agree to the terms of the Direct Debit Service Agreement in Appendix B of the �PDS dated 3 June 2009.My/our Bank/Financial Institution may, in its absolute discretion, determine the order of priority of payment by it of any moneys pursuant to this request or any �authority or mandate.My/our Bank/Financial Institution may, in its absolute discretion, at any time by notice in writing to me/us, terminate this request as to future debits. �MAAML may by prior arrangement and advice to me/us, vary the amount or frequency of future debits. �

Signature of Bank Account Holder (Director/Sole Director to sign for company) Signature of Bank Account Holder (Director to sign for company)

Name Name

Date (DD/MM/YYYY) Date (DD/MM/YYYY)

/ / / /

VOLITION FUND5

6 | PRIVACY (to be read by all applicants)

AccessYou can access, correct or update any personal information we hold about you by contacting us on 1800 080 033

PurposeMAAML collects and uses personal information for the following purposes:

to process your application �to administer your investment �to tell you about products and services (unless you ask us not to) �

Disclosing your InformationYou agree and consent that MAAML may disclose information we hold about you in the following circumstances (even if the disclosure is to an organisation overseas which is not subject to privacy obligations equivalent to those which apply to us):

to related organisations who tell you about services or products they offer which could be useful to you (unless you ask them not to) �to companies and representatives that provide services on our behalf, for example printing statements or notices which we send to you �to other Macquarie Group companies or Macquarie Group companies’ agents or contractors who may provide services in connection with this product and related �servicescollecting or assisting in the recovery of debts or providing professional advice �to your agents and representatives (for example your broker, adviser, solicitor or accountant) and any receiver, manager, liquidator or trustee in bankruptcy �if the disclosure is required or authorised by law �

What happens if you do not disclose the informationYou may choose not to give personal information about you to MAAML. Depending on the type of personal information, the consequences set out below may apply if you do not give it to MAAML:

refer to part 2 of this Application Form for the consequences if you do not supply your Tax File Number (TFN) or a valid exemption (or in certain cases an �Australian Business Number (ABN))MAAML � may not be able to approve your application for units in the VOLition Fund

You agree and acknowledge that MAAML may collect your personal information and disclose that information to relevant authorities in connection with MAAML’s obligations under the Financial Transaction Reports Act 1988 and the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.

VOLITION FUND 6

7 | APPLICANT SIGNATURE (to be completed by all applicants)

I/We acknowledge and declare that:a) I/We have read and understood the PDS dated 3 June 2009 to which this Application Form relates and the terms and conditions of the Direct Debit Service

Agreement contained in Appendix B of this PDS. b) All the information provided in this Application Form is true and correct.c) MAAML can provide information on the status of my/our investment to my/our nominated financial adviser or usual stockbroker or any associated Macquarie

Group company.d) If at any time I/we supply MAAML with personal information about another individual, I/we will ensure that I am/we are authorised to do so and agree to inform

that individual of the matters set out in this Application Form as they relate to that individual.e) I/We agree to MAAML collecting, using and disclosing my/our personal information including as set out in parts 2,3,5 and 6 of this Application Form.f) I/We agree to be bound by the Constitution for the VOLition Fund, as amended from time to time.g) I/We direct MAAML to pay any amounts payable to me/us (and not required to be reinvested in Series units) whether as a distribution or on redemption or other

withdrawal or termination of a series or VOLition Fund or otherwise in respect of my/our Series units in the VOLition Fund to any Macquarie Group company to be applied to pay any amounts accrued or due under any loan and security agreement or under any other agreement between me/us and any Macquarie Group company (each a Macquarie Entity) whether notified to MAAML by me/us or a Macquarie Entity and direct MAAML to apply any excess remainings after such application to pay or prepay, on my/our behalf, any other amount that is notified to MAAML by me/us or a Macquarie Entity as due and payable or which may become due and payable by me/us to a Macquarie Entity and without any need for MAAML to enquire as to whether the amount is in fact due and payable or will become due and payable.

h) I/We understand that MAAML is required to comply with anti-money laundering legislation and I/we agree to provide to MAAML any additional information or documentation it requests from time to time to ensure compliance with that legislation. I/we understand that, if I/we refuse to provide any additional information or documentation requested or if MAAML believes it is required to take action under any laws relating to anti-money laundering and counter-terrorism financing, MAAML may take any action it considers appropriate including refusing to issue the VOLition Fund Units to me/us or compulsorily redeeming my/our Units in the VOLition Fund which have been issued and any disposal request from me/us may be delayed or refused and MAAML will not be liable for any resulting losses.

i) I/We undertake that I/we will not knowingly do anything to put MAAML in breach of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, rules and other subordinate instruments (“AML/CTF Laws”). I/We undertake to notify MAAML if I am/we are aware of anything that would put any member of the Macquarie Group in breach of AML/CTF Laws.

j) If requested I/we undertake to provide additional information and assistance and comply with all reasonable requests to facilitate MAAML’s compliance with AML/CTF Laws in Australia or an equivalent overseas jurisdiction.

k) I/We undertake that I am/we are not aware and have no reason to suspect that:the money used to fund the investment is derived from or related to money laundering, terrorism financing or similar activities (“Illegal Activities”); and �proceeds of investment made in connection with this product will fund Illegal Activities. �

l) In making an application pursuant to this PDS I/we consent to MAAML disclosing in connection with AML/CTF Laws any of my/our personal information (as defined in the Privacy Act 1988 (Cth)) they have to any relevant authority.

m) I/We understand that in certain circumstances MAAML may be obliged to freeze or block an account where it is used in connection with Illegal Activities or suspected Illegal Activities. Freezing or blocking can arise as a result of the account monitoring that is required by AML/CTF Laws. If this occurs, MAAML is not liable to me/us for any consequences or losses whatsoever and I/we agree to indemnify MAAML if we are found liable to a third party in connection with the freezing or blocking of my/our account.

n) I/We understand that MAAML retains the right not to provide services or issue products to any applicant that MAAML decides, in its sole discretion that it does not wish to supply.

o) I/We acknowledge that:units in the VOLition Fund are offered by MAAML and not Macquarie Bank Limited; �units in the VOLition Fund are not deposits with, or other liabilities of, Macquarie Bank Limited or MAAML or any other Macquarie Group company and are �subject to investment risk, including possible delays in repayment and loss of income or capital invested; andnone of Macquarie Bank Limited, MAAML or any other Macquarie Group company guarantees any particular rate of return on, or the performance of, the �VOLition Fund, nor do they guarantee the repayment of capital from any of the VOLition Fund.

VOLITION FUND7

7 | APPLICANT SIGNATURE (to be completed by all applicants) (CONT’D)

Individual Applicants/ Joint Applicants/ Individual Trustee Applicant/ Corporate Applicant/ Corporate Trustee Applicant MUST sign here: If executing as a Corporate or Corporate Trustee Applicant, the Application Form is Executed in Accordance with section 127 (1) of the Corporations Act by authority of its directors in the presence of:

NOTE: If there are Joint Applicants, both Applicants’ signatures must be witnessed in the spaces provided below. Please note that Witnesses who sign must NOT be an Applicant on this Application Form.

Signature of Individual / Director of Corporate / Director of Corporate Trustee Applicant

Signature of Joint Individual / Joint Director of Corporate / Joint Director of Corporate Trustee Applicant

Name of Individual / Director of Corporate / Director of Corporate Trustee Applicant

Name of Joint Individual / Joint Director of Corporate / Joint Director of Corporate Trustee Applicant


/ / / /

Signature of Witness Signature of Witness

Name of Witness Name of Witness


/ / / /

8 | ANNUAL REPORTS

Copies of the VOLition Fund Annual Financial Reports will be made available on our website www.macquarie.com.au/volition. If you would like to receive a hard copy of the Annual Financial Reports please tick the box below

Yes, please send me printed versions of the VOLition Fund Annual Reports

Please note that your election will apply for all future years, unless you contact us to notify us that you have changed your mind.

VOLITION FUND 8

| APPLICATION CHECKLIST

Before you submit your Application Form to Macquarie have you:

ITEM PLEASE CHECK BOX WHEN COMPLETED

Completed Part 1 — Applicant Details

Completed Part 3 — Online Services

Competed Part 4 — Your Application

You must attach your VOLition Statement and Election Form (if applicable).

Competed Part 5 — Direct Debit Request

If a joint bank account has been nominated, all account holders must sign. �If the bank account is a company account, and the company has more than one director, at least two directors must �sign.

Completed Part 7 — Applicant Signatures

Make sure you have read and understood your rights and obligations when signing this Application Form. �If joint applicants, make sure both applicants sign this Application Form. �If a corporate applicant, and the company has more than one director, at least two directors must sign. �

Please return all documents to:

VOLition FundPO Box R1723 Royal Exchange NSW 1225

If you have any questions, please contact the Account Management Team on 1800 080 033.



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Directory Responsible Entity Macquarie Alternative Assets Management Limited ABN 30 103 237 181 AFSL 225758 Registered Office: 1 Martin Place Sydney NSW 2000 Phone: 1800 080 033 Auditor Ernst & Young ABN 75 288 172 749 Registered Office: 680 George Street Sydney NSW 2000 Solicitors to the Responsible Entity Johnson Winter & Slattery Level 30 Australia Square 264 George Street Sydney NSW 2000 Tax Advisers PricewaterhouseCoopers 201 Sussex Street Sydney NSW 2000

Documents

VOLition - Final - PDS - MQ Series - Macquarie · PDF file• Series C – MQ Equity Income; and • Series D – MQ Geared Equity Income. This is the first time Units in the above