Macquarie Group, Ltd. · ASX:MQG
Macquarie — Investor Presentation (February 2009)
87 slides from Macquarie's investor presentation, Feb 5, 2009
Slide 1: Operational Briefing
For personal use only Macquarie Group Limited Operational Briefing Presentation to Investors and Analysts 5 February 2009
Slide 2: Disclaimer
For personal use only Disclaimer This material has been prepared for professional investors. The firm preparing this report has not taken into account any customer’s particular investment objectives, financial resources or other relevant circumstances and the opinions and recommendations herein are
Slide 3: Agenda
For personal use only AGENDA 9.40 – 10.10 Update since the interim result – Nicholas Moore 10.10 – 10.30 Risk Management Group – Nick Minogue 10.30 – 10.50 Morning tea Treasury and Commodities Group – Andrew 10.50 – 11.10 Downe 11.10 – 11.30 Macquarie Securities Group – Roy Laidlaw Macquarie Funds G
Slide 4: Update since the interim result announcement
For personal use only 1. UPDATE SINCE THE INTERIM RESULT ANNOUNCEMENT Nicholas Moore – Managing Director and Chief Executive Officer Macquarie Group Limited Operational Briefing 5 February 2009 – Presentation to Investors and Analysts
Slide 5: Overview
For personal use only Overview Since September 2008, Macquarie has continued to strengthen the Group’s balance sheet funding and liquidity, completing approx. $A21b (gross) of new funding initiatives, including: — $A9.1b of planned reduction in low-yielding funded assets achieved since 30 Septembe
Slide 6: Overview
For personal use only Overview Currently anticipate FY09 profit after tax being approx. $A0.9b based on: — Operating income (before impairments) down approx.15% — Approx. $A2b of write-downs and impairment charges for the full year (including $A1.1b in 1H09) and allowing for a gain on purchase of
Slide 7: Balance sheet continues to strengthen
For personal use only Balance sheet continues to strengthen Macquarie Group Limited $Ab 31 March 2008 $Ab 30 September 2008 $Ab 31 December 20083 80 80 80 ST wholesale 70 70 70 issued paper 2.5x (16%) excess ST wholesale Cash and liquid Cash and liquid ST wholesale 1.1x Cash and liquid issued paper
Slide 8: Regulatory capital strong
For personal use only Regulatory capital strong Macquarie Group Limited – Regulatory Capital Position (31 December 2008) Capital Surplus Minimum Regulatory Capital Banking Group Requirement Non-Banking Group Buffer for Volatility, Growth and Strategic Flexibility Regulatory Capital Position as at 31
Slide 9: FY09 outlook: Impact of swing factors since interim result announcement
FY09 outlook: Impact of swing factors since interim result announcement For personal use only Swing factors Overview Changes to FY09 outlook since interim results (NPAT) Market conditions Market conditions are exceptionally challenging across all Approx. forecast change $A(100m) and completion rat
Slide 10: Impact of market conditions on Macquarie's activities
Impact of market conditions on Macquarie’s activities For personal use only Group Market conditions Impact on Macquarie Macquarie Capital M&A – Global value declined 33.0% to Estimated FY09 operating income2 down on pcp $US2.7tr in 20081 on pcp. Australia FY09 222 deals $A168.8b3 vs declined 3
Slide 11: Impact of market conditions on Macquarie's activities
Impact of market conditions on Macquarie’s activities For personal use only Group Market conditions Impact on Macquarie Macquarie Securities Australia: Total market turnover FY09 ytd Estimated FY09 operating income1 well down Group down 19% v pcp on pcp Australia: Total market turnover Dec qtr
Slide 12: Impact of market conditions on Macquarie's activities
Impact of market conditions on Macquarie’s activities For personal use only Group Market conditions Impact on Macquarie Macquarie Funds US Mutual Fund assets fell more than 20% in Estimated FY09 operating income3 well down Group the last year1 on pcp on pcp Major Australian fund managers have
Slide 13: Activity across the Group
For personal use only Activity across the Group Treasury and Mac Cap Funds Commodities, Macquarie Securities Macquarie Capital Macquarie Capital Macquarie Funds Group Macquarie Capital, Macquarie Securities Cash Equities Underwriting Advisory Funds Management Balance Sheet Australia: Strong Austra
Slide 14: Activity across the Group
For personal use only Activity across the Group Treasury and Commodities, Macquarie Macquarie Macquarie MacCap Funds Securities Capital Capital Macquarie Capital, Macquarie Funds Group Macquarie Securities Cash Underwriting Advisory Funds Balance Equities Management Sheet AUM reached $A242b at 31
Slide 15: Activity across the Group
For personal use only Activity across the Group Banking and Financial Services Funds Balance Private Wealth Intermediary Management Sheet ASX turnover (retail) of Client numbers Macquarie Cash Total retail deposits up $A5.8b vs $A7.0b in approximately 600k Management Trust at 27%2 from Sep 0
Slide 16: Estimate of FY09 one-off costs, provisions and impairments
Estimate of FY09 one-off costs, provisions and impairments For personal use only 6 mths to Sep 08 Estimate FY09 $Ab $Ab One-off costs relating to Mortgages Italy exit 0.2 0.2 Estimated write-downs1 of funds management assets/other co-investments and impairments recognised on trading asset 0.8 1.5 po
Slide 17: Asset impairment methodology
For personal use only Asset impairment methodology Impairment consideration required by Accounting Standards at each reporting date when triggered by significant changes in market, economic or legal environment Asset Impairment methodology Co-investment in Listed investments: Significant or prol
Slide 18: Infrastructure asset values demonstrating resilience
Infrastructure asset values demonstrating resilience For personal use only Date Asset Proportionate EV Transaction metrics Jan 091 Cairns Airport $A530m Approx. 14x2 (historic) EV/EBITDA Dec 08 Westlink M7 $A715m3 12% estimated IRR Dec 08 Mackay Airport $A208.8m >25x4 (historic/normalised) EV/EBITDA
Slide 19: Real estate transactions
For personal use only Real estate transactions Evidence of transactions starting to emerge Date Asset Asset class Value Transaction metrics ($Am) Jan 09 SX2, 111 Bourke St, Melbourne, CBD Office $A121.0 6.1% initial yield, 6.9% market yield1 VIC Jan 09 Golden Grove Village SC, SA Sub-regional Retail
Slide 20: Macquarie model is to focus over the medium term
Macquarie model is to focus over the medium term For personal use only Client driven business — Main business focus is providing products and services to clients — Trading businesses focussed on client transactions — Minimal proprietary trading Alignment of interests with shareholders, investors
Slide 21: Fundamental business sound, continued incremental change
Fundamental business sound, continued incremental change For personal use only Macquarie continues to deliver the highest quality service to clients — New opportunities and products — Attracting new clients as competitors exit non-core activities — Supporting clients’ capital needs and trading U
Slide 22: Continued incremental growth
For personal use only Continued incremental growth Treasury and Macquarie Macquarie Banking and Macquarie Corporate and Commodities Securities Funds Group Financial Services Capital Asset Finance United States: International: Australia: Australia: International: Australia: Acquisition of Continu
Slide 23: Outlook
For personal use only Outlook As previously advised market conditions are exceptionally challenging We continue to maintain a cautious stance with a conservative approach to funding and capital Unprecedented market conditions make short-term forecasting extremely difficult Currently anticipa
Slide 24: Risk Management Group
For personal use only 2. RISK MANAGEMENT GROUP Nick Minogue – Group Head Macquarie Group Limited Operational Briefing 5 February 2009 – Presentation to Investors and Analysts
Slide 25: Risk Management culture and approach
For personal use only Risk Management culture and approach Risk management in global financial markets The value of Risk Management in the financial services industry is being questioned Some technical aspects of Risk Management are difficult to apply successfully The diligent application of b
Slide 26: Risk at Macquarie
For personal use only Risk at Macquarie Long-standing, stable approach to risk over 30 years This approach is embedded in business unit management and business ownership of risk Seek a clear analysis of the risks before taking decisions Apply a stress test approach to all risk types Stress
Slide 27: Risk Management Group (RMG)
For personal use only Risk Management Group (RMG) RMG is independent of all business groups, oversees the Group’s prudential processes and reports to the Group Managing Director RMG has a responsibility to form an independent judgement on all material risk acceptance decisions on new limits, new
Slide 28: Risk Culture at Macquarie
For personal use only Risk Culture at Macquarie We don’t seek to predict when markets may Years of tenure of members of turn down, but to manage the business that it 40 Macquarie's Executive Committee could be tomorrow, indeed today Taking risk within limits is acceptable; 35 anything outside li
Slide 29: Lessons from the current downturn
Lessons from the current downturn Minimal exposure to problem areas in the financial services industry For personal use only As previously disclosed Macquarie has: No exposure to Structured Investment Vehicles (SIVs) No subprime lending Longstanding policy of granting very few standbys and war
Slide 30: Lessons from the current downturn
For personal use only Lessons from the current downturn A big lesson in the industry has been on liquidity and funding Until July 2007 – prior to the credit crunch – the assumption was that wholesale short term funding markets including (commercial paper) would remain open at some level even in
Slide 31: Lessons from the current downturn
For personal use only Lessons from the current downturn In bad times financial institutions and other companies expect to experience losses A key question is whether the losses are greater than were expected in a downturn The largest write-downs in Macquarie’s 1H09 results were write-downs of
Slide 32: Lessons from the current downturn
For personal use only Lessons from the current downturn In trading businesses the word “unprecedented” may be seen to be overused Natural that worst case moves will always be unprecedented Some of the moves we have seen have surprised us with their magnitude 32
Slide 33: Day gap moves
For personal use only 1 day gap moves 20 Foreign Exchange – AUD/JPY Equities – Hang Seng Index 30 Macquarie stress test Macquarie stress test 15 20 Daily % Change Daily % Change 10 10 5 0 0 -10 -5 -20 -10 -30 Macquarie stress test Macquarie stress test -15 -40 -20 -50 Nov-08 Jun-08 May-08 Oct-08 Apr
Slide 34: Day gap moves
For personal use only Daily Abs Change -5 10 15 20 25 30 -20 -15 -10 0 5 Jul-99 Apr-00 Jan-01 Oct-01 Macquarie stress test Jul-02 Apr-03 Jan-04 Oct-04 Jul-05 Apr-06 1 Week AUD/JPY Volatility Jan-07 Oct-07 Jul-08 1 day gap moves Daily % Change -100 -80 -60 -40 -20 0 20 40 60 80 100 Jan-97 Jan-98 Jan-
Slide 35: Market risk and credit risk
For personal use only Market risk and credit risk Aggregate Market Risk Actual Losses relating to Loans, Advances and Leases 35 1.0% Net losses as % of exposure 30 0.8% 25 0.6% 20 $Am 15 0.4% 10 0.2% 5 0.0% 0 20091 1991 1992 1993 1994 1996 1998 2006 2007 2008 1995 1997 2003 2005 2004 2002 1999 2000
Slide 36: Macquarie's control framework
For personal use only Macquarie’s control framework Recent events have tested controls in banking institutions Markets have been more volatile in recent past, beyond historic levels but not (generally) beyond levels we plan for Few of Macquarie’s stress tests have been exceeded. However, we ha
Slide 37: Treasury and Commodities Group
For personal use only 3. TREASURY AND COMMODITIES GROUP Andrew Downe – Group Head Macquarie Group Limited Operational Briefing 5 February 2009 – Presentation to Investors and Analysts
Slide 38: Volumes are beginning to trend downwards
For personal use only Volumes are beginning to trend downwards Activity peaked in September Volume CME Total Futures Volumes 300,000,000 280,000,000 260,000,000 240,000,000 220,000,000 200,000,000 180,000,000 160,000,000 140,000,000 120,000,000 100,000,000 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08
Slide 39: Commodity prices collapsing
Commodity prices collapsing High correlation For personal use only Commodities prices and correlation 250 80% Dow Jones Commodity Index Correlation between Dow Jones Agriculture 70% index and Energy index 200 60% 50% 150 40% 30% 100 20% 10% 50 0% -10% 0 -20% Jul-08 Jan-08 Jan-09 Jul-99 Jul-00 Jul-02
Slide 40: Equity values fallen dramatically
For personal use only Equity values fallen dramatically S&P/TSX capped Diversified Metals and Mining Index – 5 years 1000 800 600 400 200 0 Sep-07 Nov-07 Sep-08 Nov-08 Jan-08 Jan-09 Mar-08 Apr-07 Mar-07 Jul-07 Feb-04 Feb-07 Nov-04 Aug-05 Dec-06 Apr-08 Jun-06 Jul-08 Source: Reuters, TSX = Toronto Sto
Slide 41: Credit conditions worsening
For personal use only Credit conditions worsening Global credit has continued to worsen as the full extent of the financial crisis becomes known High Yield Credit Default Index 100 90 80 70 60 Feb-08 Mar-08 Apr-08 May-08 Jun -08 Jul-08 Aug -08 Sep-08 Oct -08 Nov-08 Dec -08 Jan-09 Source: Reuters -
Slide 42: TCG has continued to grow both organically and through acquisition
TCG has continued to grow both organically and through acquisition with a focus on adjacencies For personal use only TCG headcount has grown from 6311 in Feb 08 to 715 to date Agriculture & Foreign Metals & Energy Markets Futures Debt Markets Investor Central Exchange Energy Capital Products Insti
Slide 43: TCG Outlook
For personal use only TCG Outlook Full year, prior to abnormals, expected to be comparable with previous year’s strong result however, post-provisions the TCG result is expected to be well down — Energy Markets experiencing a particularly strong year — Foreign Exchange having a record year — Volat
Slide 44: Constellation Energy – transaction overview
Constellation Energy – transaction overview For personal use only Macquarie Cook Energy (MCE) & Constellation Energy — Acquisition of Constellation Energy’s down stream natural gas business — Complementary market coverage to the current MCE business — Generates high quality, long-term earnings — S
Slide 45: Constellation Energy – Key commercial activities
Constellation Energy – Key commercial activities For personal use only Formerly part of the Constellation Energy group Physical and financial natural gas trading business Low VaR, high return operation focused on strategies that integrate the physical Trading and financial aspects of the marke
Slide 46: Constellation Energy overview
For personal use only Constellation Energy overview Constellation Energy — Delivering physical gas to end-users — Matching the needs of producers and consumers – efficiently and reliably — Actively marketing to producers and large-scale North American natural gas consumers: — Gas and electric util
Slide 47: Constellation Energy & Macquarie Cook Energy
Constellation Energy & Macquarie Cook Energy For personal use only Item Description Constellation Macquarie Key Differences Energy Cook Energy Physical volumes Physical volumes of gas > 10 bcf1 per day Circa. 3 bcf1 per Constellation Energy has shipped traded on a daily basis Ranked No. 2 day signif
Slide 48: Macquarie Securities Group
For personal use only 4. MACQUARIE SECURITIES GROUP Roy Laidlaw – Group Head Macquarie Group Limited Operational Briefing 5 February 2009 – Presentation to Investors and Analysts
Slide 49: Macquarie Securities Group: Three Divisions
Macquarie Securities Group Three Divisions For personal use only Macquarie Securities Group Cash Delta 1 Derivatives Sales Arbitrage Trading Equity Linked Sales Trading Investments Synthetic Products Execution Trading Products Structured Equity Research Finance Risk Management Se
Slide 50: Rationale for merging MCS and EMG
Macquarie Securities Group Rationale for merging MCS and EMG For personal use only More product to more clients High Net Worth Hedge Funds Intermediaries Long Only Clients Direct Current Former Former Arbitrage Trading Synthetic Products Sales Structured Equity Finance Sales Tr
Slide 51: Rationale for merging MCS and EMG
Macquarie Securities Group Rationale for merging MCS and EMG For personal use only Complete set of capabilities Execution Services (PT, Algo, DMA) Sales Research Sales Trading Macquarie Arbitrage Trading Securities Derivatives Synthetic Prime Broking ECM Structured Equity Finance 51
Slide 52: Rationale for merging MCS and EMG: Six Key Opportunities
Macquarie Securities Group Rationale for merging MCS and EMG For personal use only Six Key Opportunities Building cash broking in US and Europe Improving market share in Asian cash broking Increase in products to combined client base Combining flow/inventory Expanding arbitrage trading G
Slide 53: Rationale for merging MCS and EMG
Macquarie Securities Group Rationale for merging MCS and EMG For personal use only Top tier, highly profitable, integrated, global institutional securities company: full service in Asia Pacific and specialised in the rest of the world Specialist Specialist Full Service Asia Canada US Europe Austra
Slide 54: CASH overview
Macquarie Securities Group CASH overview For personal use only Region Today Australia/NZ Full service institutional broker 240 people No. 1 ranked for market share No. 1 overall Australian Equities – Peter Lee survey Asia Full service institutional broker 2004 – Acquired ING’s Asian cash equ
Slide 55: CASH Australia – current market conditions
Macquarie Securities Group CASH Australia – current market conditions For personal use only Total ASX Market Turnover ($A Value Traded) 3,500 FY07 FY08 FY YTD 09 3,000 1 Macquarie1 11.0% Macquarie1 11.1% Macquarie1 10.7% 2,500 (19%) 2 UBS 10.2% UBS 10.0% UBS 10.1% 2,000 $Ab 3 Citigroup 8.5% GSJBWere
Slide 56: CASH Australia – current market conditions
Macquarie Securities Group CASH Australia – current market conditions For personal use only Overall Research and Sales Strength % Australian Institutions – All Investors 100 2008 Macquarie 50 0 -300 0 300 Relationship Strength Index (Difference from Average) No. 1 ranking for Peter Lee 2008 Note: Ba
Slide 57: CASH Asia – current market conditions
Macquarie Securities Group CASH Asia – current market conditions For personal use only Total Asia Market Turnover ($US Value Traded) Rolling 12 months 15,000 Market Share Dec 08 Dec 07 12,500 Hong Kong 3.8% 3.6% Ï 10,000 Singapore 6.8% 5.9% Ï (27%) $USb 7,500 Korea (foreign) 5.4% 5.0% Ï Japan 0.8% 0
Slide 58: CASH – Looking forward
Macquarie Securities Group CASH – Looking forward For personal use only Region The future Australia/NZ Maintain a profitable, highly ranked full service business Asia Continue to grow market share and improve panel reviews to be ranked top tier with most clients Reposition Japan business from
Slide 59: DELTA – Overview
Macquarie Securities Group DELTA 1 – Overview For personal use only Business Today Arbitrage Trading Executes arbitrage strategies with key markets Korea, Taiwan and India 20 front office staff Key instruments traded are equities, ADRs, GDRs, Futures and ETFs Global team spread across four loc
Slide 60: DELTA – Current market conditions
Macquarie Securities Group DELTA 1 – Current market conditions For personal use only Arbitrage Trading Market conditions have presented profitable arbitrage trading opportunities through: — Expansion of arbitrage spreads — Increased volatility — Reduction in a number of major competitors Synthetic
Slide 61: DELTA – Looking forward
Macquarie Securities Group DELTA 1 – Looking forward For personal use only Arbitrage Trading Expand arbitrage trading into other markets OTC products will increasingly trade on market leading to increased opportunities Synthetic Products Traditional prime broking model is broken Hedge fund a
Slide 62: DERIVATIVES – Overview
Macquarie Securities Group DERIVATIVES – Overview For personal use only Business Today Australia Full service listed and structured products distributed to retail and wholesale/ 60 front office staff intermediary clients Trading and risk management over Australian equities Asia Teams in Hong K
Slide 63: DERIVATIVES – Current market conditions
Macquarie Securities Group DERIVATIVES – Current market conditions For personal use only Australia Warrants Market Turnover Singapore Warrants Market Turnover Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- M
Slide 64: DERIVATIVES – Current market conditions
Macquarie Securities Group DERIVATIVES – Current market conditions For personal use only 90 80 VIX 70 60 50 40 30 20 10 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Monthly Unprecedented equity markets volatility has made trading conditions very difficult since Sep 08 The CBOE Volatility Ind
Slide 65: DERIVATIVES – Looking forward
Macquarie Securities Group DERIVATIVES – Looking forward For personal use only Outlook is for volumes to remain low and trading conditions difficult Focus on costs Continue to invest in support infrastructure to be in a position to leverage an improvement in market conditions New opportuniti
Slide 66: Macquarie Securities Group Summary
Macquarie Securities Group Summary For personal use only Equity markets look difficult for 2009 Positioning each of the businesses for when the market recovers 66
Slide 67: Macquarie Funds Group
For personal use only 5. MACQUARIE FUNDS GROUP Shemara Wikramanayake – Group Head Macquarie Group Limited Operational Briefing 5 February 2009 – Presentation to Investors and Analysts
Slide 68: Macquarie Funds Group
For personal use only Macquarie Funds Group Traditional asset management is an integral part of the services Macquarie provides to its clients Strong underlying fundamentals for sector given growing savings trends globally Currently a small contributor to Macquarie earnings, but targeted for g
Slide 69: Overview of MFG
For personal use only Overview of MFG MFG provides a range of asset management and structuring capabilities. Our business currently has a strong Australian investor base. We are prudently expanding our services offshore Asset Management Structured Investments Distribution Investment management Origi
Slide 70: Formation of MFG
For personal use only Formation of MFG Macquarie Funds Group (MFG) was formed from the merger of the funds management and funds-based structured investments within the Funds Management Group (FMG), Equity Market Group (EMG) and Macquarie Capital Products Division (MCP) FMG EMG (FPD) MCP Asset mana
Slide 71: Integration benefits already achieved
For personal use only Integration benefits already achieved Implementation of core Consistent systems and processes operating platform Economies of scale Consistent and robust risk management Streamlined control framework and risk reporting practices across all product areas Integration of dis
Slide 72: Assets under management
For personal use only Assets under management December March 2008 2008 $Ab $Ab Fixed Income, Currency & Commodities 43.8 47.0 Listed Equities 7.0 9.4 Infrastructure Securities 2.3 3.2 Real Estate Securities 1.6 3.0 Funds of PE Funds 5.4 3.7 Funds of Hedge Funds 0.5 0.6 Incubation/Affiliates 4.4 3.5
Slide 73: Diversified sources of revenue
For personal use only Diversified sources of revenue Other Affiliated Managers Listed Equities Infrastructure Securities Interest Real Estate Securities Fixed Income, Currency & Structured & Specialist Commodities Investment Fees Funds of Funds Incubation Note: Forecast Revenue for 2009 73
Slide 74: MFG's global footprint
For personal use only MFG’s global footprint North America Europe Asia Number of Staff: 54 Number of Staff: 61 Number of Staff: 36 London Frankfurt Boston Zurich Munich Seoul Los Angeles Vienna Carlsbad New York Tokyo Hong Kong Taipei Kuala Lumpur Singapore Perth Brisbane Sydney Australia Melbourne
Slide 75: Current operating environment
For personal use only Current operating environment Investors are retreating to cash based products to protect capital Increased redemptions in both mutual and hedge funds Liquidity has dropped sharply and volatility has increased to record levels with major global deleveraging occurring The average
Slide 76: Operating environment
For personal use only Operating environment AUM and base fees have fallen substantially Harder to earn out-performance fees Asset manager’s profits have fallen substantially given largely fixed cost bases Some hedge fund managers are offering reduced fee rates in return for investors locking in capi
Slide 77: MFG operating performance
For personal use only MFG operating performance Operating profit for the half year to Sep 08 well down on the pcp Funds under management as at Dec 08 ($A73b) are down by 7.1% since Mar 08, lower than global falls due to Australian institutional investor base AUM lost has been predominantly in
Slide 78: Outperformance in key sectors
For personal use only Outperformance in key sectors Credit Credentials Real Estate Securities Excess Performance to 31 Dec 20083 1 Year Retail Income1 Return 1 Year 3 Year Macquarie Income Opportunities Fund -0.08% %p.a. %p.a. Median Return -30.21% Global Unhedged 5.04 6.30 Mean Return -23.29% Domes
Slide 79: MFG – Competitive advantage
For personal use only MFG – Competitive advantage Access to committed capital Access to Macquarie Group’s strong balance sheet Committed to using capital to grow through seeding, investing in platform and acquisitions True institutional platform Strong portfolio management skills World class
Slide 80: MFG – Objectives and competencies
For personal use only MFG – Objectives and competencies Consolidate and build market share in strong Australian segments Australia is growing fast and is the fourth largest asset management market globally Australian credit: excellent performance through downturn, new mandate wins Australian e
Slide 81: Acquisition strategy
For personal use only Acquisition strategy Market conditions make acquisition potentially attractive — Earnings multiples at cyclical lows — Many asset managers require funding and investment through difficult conditions Potential to make a transformational acquisition that creates real global s
Slide 82: Acquisition outlook
For personal use only Acquisition outlook M&A activity was exceptionally thin in late 2008 — Limited strategic buyers; sellers reluctant at depressed prices — Little or no cash has changed hands in the major deals announced late 2008 Deal volumes anticipated to recover as market stabilises — Sel
Slide 83: Asset prices are at a lower point in the cycle
Asset prices are at a lower point in the cycle For personal use only Strongest driver of lower prices is lower earnings US AM Stock Price Performance European AM Stock Price Performance 120% 120% 100 100 80 Change in 80 Change in Q408 Q408 60 to 60 to 2H07 1H08 Q308 Current 2H07 1H08 Q308 Current 4
Slide 84: Appendix: Glossary
For personal use only APPENDIX Glossary Macquarie Group Limited Operational Briefing 5 February 2009 – Presentation to Investors and Analysts
Slide 85: Glossary
For personal use only Glossary $A / AUD Australian Dollar DMA Direct Market Access $US / USD United States Dollar EBITDA Earnings Before Interest, Taxes, Depreciation and Amortisation ₤ Pound € / EUR Euro ECM Equity Capital Markets 1H First Half EMG Equity Market Groups 1H09 First half ended 30 Sept
Slide 86: Glossary
For personal use only Glossary JV Joint Venture No. Number k Thousand NPAT Net Profit After Tax LVR Loan to Value Ratio NSW New South Wales, Australia m Million NZ New Zealand M&A Mergers and Acquisitions OTC Over The Counter MAP Macquarie Airports P/E Price to earnings MBL Macquarie Bank Limited pc
Slide 87: Glossary
For personal use only Glossary Tr Trillion TSX Toronto Stock Exchange UK United Kingdom US United States of America VaR Value at Risk VIC Victoria, Australia VIX Volatility Index vs Versus x Times ytd Year to date 87
Macquarie Group — Investor Presentation (February 2009) on 6ix