Sydney-based Macquarie, whose origins trace back to when three-person Hill Samuel Australia opened its doors in December 1969, prides itself on entrepreneurial spirit and opportunistic acquisitions.
Those traits have served the company well, including in the aftermath of the 2008 financial crisis. Macquarie’s acquisitions of Constellation Energy’s gas trading operations and Delaware Investments in the US provided lifts.
Expect Shemara Wikramanayake, a company veteran who took over as chief executive after Nicholas Moore stepped down in late November, to press on with a similar approach.
The question is where to turn. Infrastructure and commodities investment will always be on the agenda and Macquarie could double down on eco-savvy finance after buying Britain’s Green Investment Bank in 2017.
There may be opportunities in European money management, too.
A repeat of the counter cyclical approach from a decade ago would make the most sense, though. Australian retail banks are reeling from regulatory crack downs that include a brutal banking royal commission.
Popular discontent also has battered an industry dominated by four major competitors.
It is an area where Macquarie has been dabbling, even if its banking and financial services division accounts for just 2 per cent of the Australian mortgage market.
The operation is getting bigger, and lending could soon outpace deposit growth, limiting expansion.
None of the Big Four, led by Commonwealth Bank of Australia , are likely targets: too large and too messy.
Instead, Macquarie could pursue a strained regional bank, such as $5.1 billion Bendigo and Adelaide Bank, or Bank of Queensland, which had lost a fifth of its value through the first 11 months of 2018.
Neither is especially well-placed to handle the regulatory and technological challenges ahead, but would suit a quinquagenarian in search of a new adventure.
– Macquarie said on November 16 that it expects an increase of up to 15 per cent in full-year earnings through March 2019, thanks to the sale of gas supplier Quadrant Energy, in which it held a 21.8 per cent stake.
– Shemara Wikramanayake, a Macquarie veteran and head of the bank’s asset management unit, replaced Nicholas Moore as chief executive after he retired on November 30. He spent 32 years at the company.