Macquarie Group

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Macquarie Group Limited
Public
Traded as ASXMQG
Industry Financial Services
Founded 1969; 48 years ago (1969)
Headquarters 50 Martin Place
Sydney, New South Wales
Australia
Area served
Worldwide
Key people
Peter Warne (Chairman)
Nicholas Moore (CEO)
Products Asset management, Investment banking, Corporate banking, Private equity, Equities trading, Commodity trading, Futures and options trading, Foreign exchange trading, Money market trading, Consumer Banking, Wealth management, Investment Management
Increase A$10.4 billion (2017)
Increase A$2.2 billion (2017)
AUM Increase A$481.7 billion (2017)
Number of employees
Decrease 13,597 (2017)
Capital ratio 11.1% (2017)
Website www.macquarie.com

Macquarie Group Limited is a global investment banking and diversified financial services group, providing banking, financial advisory and investment and funds management services to institutional, corporate and retail clients and counterparties around the world. Headquartered in Sydney, Macquarie is the largest Australian investment bank and the top ranked mergers and acquisitions advisor in Australia. Macquarie employs more than 14,000 staff in more than 70 office locations across 28 countries and has more than $A450 billion in assets under management.[1]

Macquarie is listed in Australia (ASX:MQG) and is regulated by APRA, the Australian banking regulator, as the owner of Macquarie Bank Limited, an authorised deposit taker.

The company’s high margins, profits and the lucrative rewards for its executives and shareholders saw the Australian media label the bank “The Millionaire Factory” due to their notably strong performances.[2] As of 6 May 2016, the group’s chief executive Nicholas Moore became the nation’s highest paid CEO of a listed company as they announced a net profit after tax for the year at $2.06 billion.[3]

History[edit]

1969 - 1979[edit]

Macquarie was founded on 10 December 1969 as Hill Samuel Australia Limited, a subsidiary of the UK's Hill Samuel & Co. Limited.[4]

Australian businessman Stan Owens compiled a proposal for Hill Samuel & Co. to establish an Australian subsidiary. After presenting his report in London, Mr Owens was offered the role of implementing it. He became Executive Chairman of Hill Samuel Australia (HSA) and founded the company in Gold Fields House in Sydney's Circular Quay. The company's first three employees were Stan Owens, Blair Hesketh and Geoff Hobson. Later Chris Castleman (on loan from the British parent) and Bill Clarke joined. David Clarke and Mark Johnson were introduced to HSA and became joint Managing Directors in 1971. Despite being given a four-year allowance by the British parent to turn a profit, HSA was profitable by the end of its first twelve months of trading.

In 1971 HSA secured Australia’s biggest mandate at the time, a $US60 million financing for corrugated iron manufacturer John Lysaght Australia. HSA expanded its presence in the Australian market, opening a Melbourne office in 1972, and a Brisbane office in 1975.

In other business initiatives during the decade, HSA helped pioneer the foreign currency hedge market in Australia, commenced gold bullion trading, extended its coverage to all listed commodities and was one of the first merchant banks to be granted floor member status at the Sydney Futures Exchange.

1980 - 1989[edit]

The 1980s were marked by significant financial market deregulation in Australia, including the floating of the Australian dollar and the removal of restrictions on foreign banks. To take advantage of the opportunities offered by deregulation, HSA submitted a proposal for the formation of a new substantially Australian owned and controlled bank to be called Macquarie Bank Limited.[5] Authority for HSA to become Macquarie Bank Limited (MBL) was received from the Federal Treasurer on 28 February 1985, making it only the second private trading bank to be established in Australia in modern times.[6]

The bank continued to grow its activities in the 1980s. It became Australia's leading bullion trader, initiated 24-hour foreign exchange trading, commenced stockbroking and corporate leasing activities, opened offices in London and Munich, expanded into funds management by establishing Australia’s first cash management account and formed a new structured finance business which would grow to become one of the largest in the world.[5] It also implemented the risk management framework which is credited for the organisation's long history of unbroken profitability. The framework ensured Macquarie was not materially exposed to the October 1987 global share market crash.

In other initiatives, Macquarie established its philanthropic arm, the Macquarie Group Foundation, which has since contributed more than $A300 million to community organisations around the world, and established what has become one of Australia’s largest corporate art collections, the Macquarie Group Collection.[7]

1990 - 1999[edit]

On 29 July 1996, Macquarie Bank Limited listed on the Australian Securities Exchange (ASX:MQG).[8] By 30 October 1996 Macquarie had entered the ASX All Ordinaries Index, with a market capitalisation of approximately $A1.3 billion and would grow to become one of Australia's largest listed companies.

Macquarie continued its overseas expansion during the early 1990s, opening offices in New York, Hong Kong, Singapore and Beijing, while extending its Australian operations to Perth and the Gold Coast. Acquisitions during the decade included Boston Australia Limited, Security Pacific Australia and the investment banking arm of Bankers Trust Australia.[9]

In 1994 Macquarie began its infrastructure investment business with the underwriting and placement of publicly listed equity for the Hills Motorway in Sydney.[5] It has continued to grow these activities to become the world's leading infrastructure manager.[10] During the decade, Macquarie also launched its private banking and residential mortgages businesses and established a number of real estate and investment trusts.

2000 - 2009[edit]

50 Martin Place, Macquarie Group's global headquarters in Sydney, Australia.

Macquarie continued to expand its Asia operations in the early 2000s with the opening of offices in Seoul and Tokyo in 2000, and through the acquisition of ING Group’s Asian cash equities business in March 2004.[11]

The decade was also marked by the global expansion of Macquarie's infrastructure business, with infrastructure investment funds established in Korea, China, Europe, Russia, India and the Middle East. On 16 December 2004, Macquarie Infrastructure Corporation began trading as Macquarie Infrastructure Company Trust on the New York Stock Exchange (NYSE:MIC).[12]

Macquarie made a number of significant acquisitions, particularly in the US, in the later part of the 2000s. These included US energy marketing and trading company Cook Inlet Energy Supply, establishing Macquarie's physical natural gas trading business in the US, and Constellation Energy’s Houston-based downstream natural gas trading operations, making Macquarie Group the fourth largest physical gas trader in North America.[13]

Other acquisitions included UK gas supply company Corona Energy in August 2006 and, in 2009, independent energy independent energy advisory firm Tristone Global Capital Inc; specialist investment bank Fox-Pitt Kelton Cochran Caronia Walker; Canadian wealth management business Blackmont Capital Inc; the wholesale electricity trading business of US firm Integrys Energy; US-based fixed income fund manager Allegiance Investment Management; the equity derivatives and structured products business of German private bank Sal. Oppenheim; and Condor Ferries service between the UK, Channel Islands and France.[14][15]

In 2005 Macquarie announced an unsolicited takeover bid for the London Stock Exchange valuing the company at £1.5 billion, a bid rejected by LSE management.[16]

In 2007, MBL securityholders and the Federal Court approved the restructure of the Macquarie group into a non-operating holding company (NOHC) structure.[17]

2010 - present[edit]

No. 1 Martin Place, Macquarie Group's secondary office in Sydney, Australia.

In 2010 Macquarie Group completed its then largest acquisition with the purchase of Delaware Investments, a leading US-based diversified asset management firm, from Lincoln Financial Group.[18] As a result of the acquisition, Macquarie is now one of the world's top 50 asset managers. Delaware Investments was re-branded as Macquarie Investment Management in 2017.[19]

Macquarie has significantly grown its renewable energy activities this decade. In January 2015, Macquarie Group acquired a stake in Baltic 2 offshore wind park from EnBW for a fee totalling €720 million.[20] Macquarie Group led a consortium of bidders to successfully acquire the British Green Investment Bank for £2.3 billion.[21] The takeover means the group will manage or supervise around £4 billion of green infrastructure assets and projects, with a further £3 billion of investment targeted.[22] The accompanying announcement stated that it will still pursue its main purpose of attracting private funds to invest in renewable energy generation assets.

Macquarie's Corporate and Asset Finance business made a number of significant acquisitions. In March 2015 Macquarie announced the acquisition of a $US4 billion aircraft operating lease portfolio from AWAS Aviation Capital Limited.[23] In October Macquarie entered into an agreement to acquire the $A8.2 billion Esanda dealer finance portfolio from ANZ Banking Group.[24]

Current operations[edit]

Macquarie employs 13,597 staff in over 27 countries.[25] Macquarie’s business activities are organised into five principle operating groups.[26]

There are three annuity-style businesses:

  • Macquarie Asset Management – The world’s biggest infrastructure asset manager and a top 50 global asset manager, managing more than $A450 billion of assets on behalf of superannuation funds and other institutional investors
  • Corporate and Asset Finance – Lends to customers and leases assets to businesses including a fleet of more than 600,000 cars, passenger aircraft, medical equipment, electronics equipment, rail stock and mining equipment
  • Banking and Financial Services – Comprises Macquarie’s retail banking operations and provides personal banking, wealth management and business banking products and services to more than 1 million clients.
101 Collins Street; Macquarie Group's Melbourne office.

There are two capital markets facing businesses:

  • Commodities and Global Markets – Conducts research on more than 2,300 stocks and market trading on behalf of clients across more than 160 products including equities, derivatives, fixed income, foreign exchange and commodities
  • Macquarie Capital – Advises companies on growth opportunities, sources investment funds, negotiates transactions and lists companies on the share market, as well as investing alongside clients.

In addition to the principle operating groups, Macquarie has a network of support groups including; Corporate Operations Group, Financial Management Group, Legal and Governance Group and Risk Management Group.

Macquarie’s Managing Director and Chief Executive Officer is Nicholas Moore, who replaced Allan Moss in May 2008.[27]

In the year 31 March 2017, Macquarie reported a record net profit $A2.2 billion and a record dividend of $A4.70 per share.[28]

Board of directors[edit]

Macquarie Group's current Board of Directors includes:

[edit]

Macquarie Group takes its name from Major General Lachlan Macquarie, one of Australia’s early leaders who established the nation's first bank, introduced its first currency and initiated many significant economic and social reforms.

Macquarie Group's logo is a stylised representation of the Holey Dollar, Australia's first official currency.[43]

In 1813 Governor Lachlan Macquarie overcame an acute currency shortage in the colony of New South Wales by importing 40,000 Spanish silver dollars and punching a hole through the centre of them to create two unique coins, the Holey Dollar and the Dump.[43] The new currency stimulated the economy while retaining its intrinsic value, with the two new coins worth 25 per cent more than the original.

According to Macquarie Group, the Holey Dollar was Australia’s earliest example of financial innovation and embodies its pursuit of practical approaches with profitable outcomes.[44]

Reverse of an 1813 Holey Dollar, in the collection of the State Library of NSW.

Notable former employees[edit]

Business[edit]

  • Christopher Castleman - General Manager Hill Samuel Australia (1970-1971)
  • David Clarke - Joint Managing Director Hill Samuel Australia (1971-1977), Managing Director Hill Samuel Australia (1977-1984), founding Chairman of Macquarie Bank Limited (1984-2011)
  • Mark Johnson - Joint Managing Director Hill Samuel Australia (1971-1977), Director and/or Deputy Chairman Macquarie Bank Limited (1987-2007)
  • Tony Berg - Managing Director and Chief Executive Officer (1984-1993)
  • Allan Moss - Managing Director and Chief Executive Officer (1993-2008)
  • Richard Sheppard - Deputy Managing Director (1996-2011)

Public service[edit]

Macquarie Bank maintains political connections through the appointment of former politicians and senior political staffers to senior positions.

Criticism[edit]

The company's high margins, profits and the lucrative rewards for its executives and shareholders saw the Australian media label the bank 'The Millionaire Factory' due to their notably strong performances.[45]

In 2010, Macquarie Group through its subsidiary Macquarie Equipment Rentals was criticised by the Australian Competition and Consumer Commission for suing 300 small businesses caught up in misleading telephony bundling deals.[46]

In 2017, Macquarie, via a deal in which it acquired Thames Water, a private utility company responsible for the public water supply and waste water treatment in the UK, was found to have burdened Thames Water with £2bn of debt before selling its stake in Thames Water. These disclosures followed scrutiny of the possible financial causes of Thames water's extensive pollution of the Thames, and other rivers, with untreated sewage between 2012 and 2014, for which Thames Water was fined a record £20m. [47] [48]

See also[edit]

References[edit]

  1. ^ Chandni, Trehan (1 September 2016). "50 MOST POWERFUL M&A FIRMS IN THE WORLD". Upside. 
  2. ^ Desloires, Vanessa (22 September 2014). "Return of the 'millionaire's factory': Macquarie Bank splashing the cash again.". Sydney Morning Herald. Retrieved 24 August 2017. 
  3. ^ Moullakis, Joyce (5 May 2017). "Macquarie Group's Nicholas Moore's $18.7m bonanza should keep him at top of pay ladder". Australian Financial Review. Retrieved 24 August 2017. 
  4. ^ developer@themonthly.com.au (4 July 2007). "Who’s afraid of Macquarie Bank?". The Monthly. Retrieved 9 February 2017. 
  5. ^ a b c developer@themonthly.com.au (4 July 2007). "Who’s afraid of Macquarie Bank?". The Monthly. Retrieved 11 February 2017. 
  6. ^ Australia, scheme=AGLSTERMS.AglsAgent; corporateName=Reserve Bank of. "Historical Series Breaks". Reserve Bank of Australia. Retrieved 9 February 2017. 
  7. ^ "Partner's message :: Australian :: Art Gallery NSW". www.artgallery.nsw.gov.au. Retrieved 9 February 2017. 
  8. ^ "Macquarie – how the mighty have changed - Share Trading | Switzer". www.switzer.com.au. Retrieved 11 February 2017. 
  9. ^ Newswires, Dow Jones (28 June 1999). "Macquarie Bank to Acquire Unit of Bankers Trust Australia". Wall Street Journal. ISSN 0099-9660. Retrieved 9 February 2017. 
  10. ^ "Global Alternatives Survey 2017". Willis Towers Watson. Retrieved 18 August 2017. 
  11. ^ "East & Partners | Macquarie snaps up ING’s Asian equity business". east.com.au. Retrieved 9 February 2017. 
  12. ^ "Macquarie Infrastructure Company Reports 2004 Results (NYSE:MIC)". investor.shareholder.com. Retrieved 9 February 2017. 
  13. ^ "Macquarie Wins as Australia Suffers From Commodity Rout". Bloomberg.com. 29 January 2015. Retrieved 9 February 2017. 
  14. ^ "The Corona Energy journey :: Corona Energy". Corona Energy. Retrieved 9 February 2017. 
  15. ^ "Macquarie to Buy the Boutique Firm Fox-Pitt Kelton". Retrieved 9 February 2017. 
  16. ^ Muspratt, By Caroline. "LSE rejects 'derisory' Macquarie bid". Telegraph.co.uk. Retrieved 9 February 2017. 
  17. ^ "MACQUARIE BANK LIMITED RECEIVES FINAL AUSTRALIAN FEDERAL COURT APPROVAL FOR RESTRUCTURE OF MACQUARIE GROUP" (PDF). Australian Securities Exchange. 2016. 
  18. ^ McFarland, Lyndal (20 August 2009). "Macquarie to Acquire Delaware Investments". Wall Street Journal. ISSN 0099-9660. Retrieved 9 February 2017. 
  19. ^ "Macquarie Group's Delaware Investments Rebrands as Macquarie Investment Management". Macquarie. 3 April 2017. Retrieved 15 June 2017. 
  20. ^ EnBW sells offshore windpark stake to Macquarie for 720 million euros. Reuters, 8 January 2015
  21. ^ "Macquarie Group leads consortium to acquire the Green Investment Bank". www.macquarie.com. Retrieved 23 February 2017. 
  22. ^ "Australia's Macquarie Group acquires UK's Green Investment Bank". www.smh.com.au. Retrieved 23 April 2017. 
  23. ^ "Macquarie to Buy Aircraft for $4 Billion, Raise Capital". Bloomberg.com. 3 March 2015. Retrieved 9 February 2017. 
  24. ^ "Sale of Esanda Dealer Portfolio to Macquarie | Esanda". www.esanda.com. Retrieved 9 February 2017. 
  25. ^ "FY17 Annual Report | Macquarie Group". FY17 Annual Report | Macquarie. Retrieved 5 May 2017. 
  26. ^ Macquarie Group (30 July 2017), The Macquarie Story, retrieved 22 August 2017 
  27. ^ a b c d e f g h i j "Board of Directors | Macquarie Group". www.macquarie.com. Retrieved 16 January 2017. 
  28. ^ "Macquarie Group 2017 profits beat expectations". Financial Review. 5 May 2017. Retrieved 22 August 2017. 
  29. ^ "ASX Group Board". www.asx.com.au. Retrieved 16 January 2017. 
  30. ^ Moullakis, Joyce (24 September 2015). "Macquarie Group appoints Peter Warne chairman". The Sydney Morning Herald. Retrieved 16 January 2017. 
  31. ^ "Gary Banks | ANZSOG". www.anzsog.edu.au. Retrieved 16 January 2017. 
  32. ^ "Board of Directors - Woolworths Group". Retrieved 16 January 2017. 
  33. ^ Energy, Origin (1 December 2016). "Our Board - Origin Energy". www.originenergy.com.au. Retrieved 16 January 2017. 
  34. ^ "New chairman Cairns promises strong corporate governance for David Jones". ABC News. 12 March 2014. Retrieved 16 January 2017. 
  35. ^ "Cairns commences as Woolworths chair - Australian Institute of Company Directors". www.companydirectors.com.au. Retrieved 16 January 2017. 
  36. ^ Foundation, Planet Ark Environmental. "Meet the Board". Planet Ark. Retrieved 16 January 2017. 
  37. ^ a b "Board of directors - - Aviva plc". www.aviva.com. Retrieved 16 January 2017. 
  38. ^ "Board of Directors". www.spotless.com. Retrieved 16 January 2017. 
  39. ^ "Tennis Australia Board and Executive Team – About Tennis Australia - Tennis Australia". Tennis Australia. Retrieved 16 January 2017. 
  40. ^ "About Washington H. Soul Pattinson". www.whsp.com.au. Retrieved 16 January 2017. 
  41. ^ "Nicola M. Wakefield Evans". www.lendlease.com. Retrieved 16 January 2017. 
  42. ^ "- Chief Executive Women". Chief Executive Women. Retrieved 16 January 2017. 
  43. ^ a b http://www.modd.com.au, MODD Digital Design -. "The 1813 Holey Dollar - our first coin, rare & desirable". Coin Works. Retrieved 17 January 2017. 
  44. ^ "About | Holey dollar | Macquarie Group". www.macquarie.com. Retrieved 17 January 2017. 
  45. ^ "Return of the 'millionaire's factory': Macquarie Bank splashing the cash again". The Sydney Morning Herald. 
  46. ^ "Samuel slams Macquarie over telco scam". The Sydney Morning Herald. 1 November 2010. 
  47. ^ "Macquarie ‘transferred £2bn of debt’ on to Thames Water’s books". The Financial Times. 5 September 2017. 
  48. ^ "How Macquarie bank left Thames Water with extra £2bn debt". The BBC. 5 September 2017. 

External links[edit]