THERE'S nothing like a financial crisis to create an identity crisis.
Two years after it skirted the precipice of the global credit crunch, who, or what, is Macquarie Group?
Gone are the listed infrastructure satellites. Gone is the fee-generating externally managed funds model. Long gone is boom-time boss Allan Moss.
Presenting the bank's 2010 full-year result in his latter-day role as chief austerity officer, Nicholas Moore seemed more certain of what Macquarie is not.
With Goldman Sachs fingered in a US Senate inquiry this week for its role in fuelling the credit crisis, Moore was asked if self-righteous Goldman executives believed they were doing God's work, perhaps Macquarie was doing the devil's work?
"We're not Goldman Sachs," Moore assured his audience.
Well, not that much like them, given Macquarie's accounts directly compare the bank with Goldman when it comes to setting Macquarie's rapidly rebounding remuneration levels.
After all, comparisons with other industry peers are a little more difficult these days, the bank's accounts show.
"As a result of the changes in the investment banking landscape, Macquarie considered its peer group in light of the absence of Babcock & Brown, Bear Stearns and Lehman Brothers." All gone to meet their maker.
Macquarie was bolstered by the use of the Australian taxpayer's AAA-rated government credit rating to help it raise money overseas and the short-selling ban on financial stocks. But it was forced to change.
Just three years ago, the listed investment bank made about a quarter of its money from fees from the listed managed fund model. Moore has been busy recasting Macquarie and it is now beginning to resemble something far different.
Asked to describe it, he said: "There are elements of our business that are very much investment banking style, commercial banking, funds management." On top of that, it has been buying energy trading and asset management businesses in the US, taking market share on Wall Street where investment banking has been brought to its knees.
Macquarie 2.0 sounds an awful lot like a traditional investment bank.
Moore's salary, certainly, is nudging back towards double-digit million-dollar territory.
Analysts still want to know what's next. But the bank known as the millionaire's factory is at least hiring again. Prestige car yards and real estate agents can breathe easy.
Frequently Asked Questions about this Article…
What changes did Macquarie Group make after the global financial crisis?
After the crisis Macquarie moved away from listed infrastructure satellites and the externally managed fee model that once generated about a quarter of its revenue, recasting its business to include elements of investment banking, commercial banking and funds management while buying US energy trading and asset management businesses.
How did Macquarie’s 2010 full‑year result describe the bank’s identity?
Presenting the 2010 full‑year result, Nicholas Moore described what Macquarie is not and outlined a new mix of businesses — saying there are elements of investment banking, commercial banking and funds management — signalling a shift from the pre‑crisis model.
Is Macquarie Group becoming more like a traditional investment bank?
The article suggests Macquarie 2.0 increasingly resembles a traditional investment bank, having taken market share on Wall Street and integrated investment banking‑style activities alongside its funds and commercial banking operations.
How did Macquarie benefit from Australia’s AAA credit rating and short‑selling ban?
Macquarie was bolstered by using Australia’s AAA‑rated government credit rating to help raise money overseas and also benefited from the short‑selling ban on financial stocks during the crisis period.
Who is Nicholas Moore and what role did he play at Macquarie?
Nicholas Moore presented the 2010 results in his role described as 'chief austerity officer,' overseeing a strategic recasting of Macquarie’s business and signalling the bank’s move away from its former structures.
How did the collapse of peers like Bear Stearns and Lehman Brothers affect Macquarie’s peer comparisons?
Macquarie’s accounts noted that the investment banking landscape changed with the absence of firms such as Babcock & Brown, Bear Stearns and Lehman Brothers, making traditional peer comparisons more difficult.
What US expansion did Macquarie pursue after the crisis?
The bank has been buying energy trading and asset management businesses in the US, taking market share on Wall Street while some traditional investment banking competitors were weakened.
What does the article say about Macquarie’s executive pay and hiring since the crisis?
The article notes remuneration at Macquarie was rebounding, with Nicholas Moore’s salary nudging back toward double‑digit millions, and that the bank — once dubbed the 'millionaire’s factory' — was hiring again.
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