Macquarie Group, Ltd. · ASX:MQG
Macquarie — Investor Presentation (February 2008)
111 slides from Macquarie's investor presentation, Feb 6, 2008
Slide 1: Operational Briefing – Presentation to Investors and Analysts
For personal use only Macquarie Group Limited Operational Briefing Presentation to Investors and Analysts 6 February 2008
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: Introduction
For personal use only Introduction Richard Sheppard – Deputy Managing Director Macquarie Group Limited Operational Briefing 6 February 2008 – Presentation to Investors and Analysts
Slide 4: Agenda
For personal use only AGENDA Management update – David Clarke, Allan Moss 9.40 – 10.00 & Nicholas Moore 10.00 – 10.30 Update since the interim result – Allan Moss 10.30 – 11.00 Macquarie Capital – Nicholas Moore 11.00 – 11.15 Morning tea 11.15 – 11.30 Financial management update – Greg Ward 11.30 –
Slide 5: Update since the interim result
For personal use only Update since the interim result Allan Moss – Managing Director and Chief Executive Officer Macquarie Group Limited Operational Briefing 6 February 2008 – Presentation to Investors and Analysts
Slide 6: Key points
For personal use only Key points Subject to market conditions: — Expect 2H08 result to be at least in line with 2H07 result of $A733m — If achieved, result for FY08 will be at least $A1.8b, 23% up on prior year Macquarie remains: — Very profitable — Well capitalised, and — Well funded Continue
Slide 7: Key points (contd.)
For personal use only Key points (contd.) No unusual trading exposures No unusual concerns with credit quality Funding costs have increased (detail in Financial Management presentation) Commitment to strategic alignment with investors through investments in Macquarie- managed funds — Total m
Slide 8: Comments on Macquarie's third quarter (to Dec 2007)
Comments on Macquarie’s third quarter (to 31 Dec 2007) For personal use only 3Q08 (to 31 Dec 2007) result was 13% up on pcp and marginally up on 2Q08 All Groups reported a profit for the quarter No unusual trading write-downs Potential provision on investments in real estate funds to be asse
Slide 9: Comments on Macquarie's third quarter (contd.)
Comments on Macquarie’s third quarter (contd.) (to 31 Dec 2007) For personal use only Assets under management up 2% to $A228b (from $A224b at Sep 2007) Continued strong specialist fund raisings – $A5b raised during the quarter, predominantly for unlisted international funds No significant asse
Slide 10: Assets under management $A228 billion
For personal use only Assets under management $A228 billion $Ab 250 FSG/FMG Wholesale $A228b FSG/FMG Retail $A224b Other Specialist $A197b 200 Real Estate Infrastructure 150 $A140b 100 $A97b $A63b $A52b 50 $A41b 0 2002 2003 2004 2005 2006 2007 Sep-07 Dec-07 Refer to glossary for calculation of AUM.
Slide 11: Equity investments
Equity investments1 Alignment of interests with investors For personal use only Substantial investments held in Macquarie-managed funds and listed fund managers: $A3.6b at 31 Jan 20082 Listed funds and listed fund managers: $3.0b – net unrealised gains of approx $403m3 Unlisted funds: $0.6b –
Slide 12: Positions in listed specialist funds and listed fund managers
Positions in listed specialist funds and listed fund managers For personal use only Investments at cost1 Market value Unrealised gain/(loss) ($Am) @ 31/01/08 ($Am) @ 31/01/08 ($Am) @31/01/08 Macquarie Airports (MAp) 708 1,123 415 Macquarie Capital Alliance Group (MCQ) 135 136 1 Macquarie Communicati
Slide 13: Accounting for investments in funds
For personal use only Accounting for investments in funds Investments in Macquarie-managed funds are equity accounted Unrealised market gains are not brought to account Impairment assessed at each reporting date — Carrying value compared with the present value of future expected cash flows — I
Slide 14: Specialist fund raisings – strong support from international investors
Specialist fund raisings – strong support from international investors For personal use only $A5b raised over 3 months to 31 Dec 2007 62% from international investors and 99% into unlisted funds or syndicates — MacCap Funds: $A6b available for investment — Real Estate Funds: $A4.6b available for
Slide 15: Brief update on global market conditions
For personal use only Brief update on global market conditions Credit markets — Investor sentiment still weak — International short term funding markets have improved in some areas — Australian short term markets continue to function normally — Global term funding markets, including the securitisa
Slide 16: Brief update on global market conditions
For personal use only Brief update on global market conditions Investment banking industry transaction flow — Uncertainty in credit markets impacting global deal flow — Asia remains relatively good, Australia reasonable, US and Europe quieter Global real estate — Credit squeeze has accelerated a
Slide 17: High broking volatility and volumes
For personal use only High broking volatility and volumes High equity market volumes in key regions continued in October and November December volumes down - however well up on pcp Strong volumes in January Index Market Turnover 200 180 Asian market turnover * 160 ASX market turnover ^ 140 120
Slide 18: No unusual trading exposures
For personal use only No unusual trading exposures Main business focus is making returns by providing services to clients rather than by principal trading No material exposures not already known to investors No problem trading exposures No material problem credit exposures No exposure to S
Slide 19: Update by operating group: Macquarie Capital
For personal use only Update by operating group Macquarie Capital Reasonable M&A volumes and pipeline in Australia and Asia Good ECM volumes in Australia, Asia and Canada. Reasonable pipeline over the next 12 months despite short-term impact of equity market volatility Continuing high broking
Slide 20: Update by operating group: Treasury and Commodities, Equity Markets
For personal use only Update by operating group Treasury and Commodities Benefiting from ongoing volatility Increased volumes across most businesses Expect 2H08 to be: — Broadly in line with very good 1H08 — Broadly in line with 2H07 which included oil and gas realisation Expect FY08 to be b
Slide 21: Update by operating group: Real Estate
For personal use only Update by operating group Real Estate Current conditions in global REIT markets are challenging Assets in managed funds operating soundly with high occupancy and strong lease profile Well placed to take advantage of opportunities that current markets may present Expect
Slide 22: Update by operating group: Financial Services, Funds Management
For personal use only Update by operating group Financial Services Recent equity market volatility has had an impact on FUM/FUA but inflows remain strong Continuing good retail broking volumes although down from highs of 1H08 Expect 2H08 to be: — Down on very strong 1H08 which included higher
Slide 23: Update by operating group: Banking and Securitisation
For personal use only Update by operating group Banking and Securitisation Investment lending and relationship banking businesses continue to perform well Mortgages business: — Good credit quality — Limited access to securitisation market — Increased funding costs — As previously advised, less t
Slide 24: Some initiatives since the interim result: Asia
Some initiatives since the interim result (13 Nov 2007) For personal use only Asia Good growth in M&A and ECM businesses with strong activity levels during 3Q08 PTC Financial Services – agreement to acquire 20% of Indian energy investment company Macquarie Global Property Advisors (MGPA) – big
Slide 25: Some initiatives since the interim result: The Americas
Some initiatives since the interim result (13 Nov 2007) For personal use only The Americas CIT Systems Leasing – acquisition of equipment leasing business. Integration of 180 staff, operating as Macquarie Equipment Finance Orion Securities Inc – integration of Canadian team of 130, operating as
Slide 26: Some initiatives since the interim result: Europe and Middle East
Some initiatives since the interim result (13 Nov 2007) For personal use only Europe and Middle East Techem – MEIF II’s €1.4b acquisition of listed German sub-metering company European Gaming (Talarius) – sale of holding (50%) to Tattersalls Macquarie Capital Securities – Expansion of institut
Slide 27: Some initiatives since the interim result: Australia
Some initiatives since the interim result (13 Nov 2007) For personal use only Australia No. 1 calendar ‘07 announced and completed deals by volume; No. 2 completed deals by value (Thomson) No. 2 calendar ‘07 ASX broker market share1(ASX) No. 2 calendar ‘07 equity and equity related underwritin
Slide 28: Current year outlook
For personal use only Current year outlook Subject to market conditions: — As previously advised, expect 2H08 result to be at least in line with 2H07 result of $A733m, but down on very strong first half because of change in market conditions and lower level of asset sales — If achieved, result for
Slide 29: Q&A
For personal use only Q&A Allan Moss – Managing Director and Chief Executive Officer Macquarie Group Limited Operational Briefing 6 February 2008 – Presentation to Investors and Analysts
Slide 30: Macquarie Capital
For personal use only Macquarie Capital Nicholas Moore – Group Head Macquarie Group Limited Operational Briefing 6 February 2008 – Presentation to Investors and Analysts
Slide 31: Our structure
For personal use only Our structure MACQUARIE CAPITAL Nicholas Moore PRINCIPAL INVESTMENTS MACQUARIE MACQUARIE CAPITAL MACQUARIE CAPITAL MACQUARIE CAPITAL & PRUDENTIAL CAPITAL ADVISERS SECURITIES PRODUCTS FINANCE MANAGEMENT Michael Carapiet Roy Laidlaw Michael Price Garry Farrell Stephen Allen John
Slide 32: Global activities
For personal use only Global activities 53 offices (48 outside Australia) 5 new offices since 1 April 2007 EUROPE & MIDDLE EAST ASIA NORTH AMERICA 661 staff 1,009 staff 699 staff Beijing Seoul Tokyo Shanghai Calgary Taipei Vancouver Dublin Hong Kong Seattle Toronto London Moscow * New Delhi Mani
Slide 33: Seven years of growth
For personal use only Seven years of growth Executive staff Compound growth in staff of 25% over 7 years to FY08E 570 new executives hired in FY08 YTD 186 graduates in FY08 164 admissions into INSEAD Masters Executive Staff Revenue ($Am) FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08E Macquarie Cap
Slide 34: Income diversity
For personal use only Income diversity FY08 Estimated Mac Cap FY08 Estimated Mac Cap Net Income* by Division Net Income* by Region Mac Cap Finance Mac Cap Products 3% 10% Australia Mac Cap 35% Securities 46% 18% Mac Cap Advisers International 65% 23% Mac Cap Advisers (Funds)# * Estimate for Financia
Slide 35: Leveraging opportunities
For personal use only Leveraging opportunities Idea Brokerage Advice Underwriting Funds Principal AIIF, DUET, GIFs, KIEF, MIG, Aquarion, Puget MAp, MCG, MKIF, MKOF, Infrastructure MEAP, MEIF, MEIF 2, MIP, Energy, Peterborough MIIF, MIC, MPT, SAIF Hospital, Hobart Airport Gateway Casinos, Red Bee TME
Slide 36: Our model
For personal use only Our model A unique complete service provider Financial Fund & Asset Broker Underwriter Principal Adviser Manager Governance Separation Macquarie Capital Advisers Macquarie Capital Funds Advisory (third party and fund) Funds focus Asset sourcing Quality asset acquisition
Slide 37: Risk management
For personal use only Risk management “Ownership”: Risk is everyone’s responsibility Central Principal Investments & Prudential Management unit within Macquarie Capital reviews transactions (in addition to centralised Group-wide risk review) Fund management teams and Independent Directors / Inve
Slide 38: Investing in staff
For personal use only Investing in staff Management commitment Continue to hire: expect to hire 186 graduates over the course of FY08 Staff engagement is critical management task Mac Cap Professional Development Programme (grads and lateral induction) Mac Cap / AGSM Leadership and Management
Slide 39: Global environment
For personal use only Global environment Asia Europe & North America Continued growth in Asian M&A M&A activity in Europe and North volumes America depressed — Outward investment from North Asia — Equity still available particularly strong — However, less debt available, Credit crisis has impa
Slide 40: Global environment: Australasia
For personal use only Global environment Australasia M&A – Strong corporate balance sheets and resources boom continue to drive takeover activity Financing support available for good assets and relationship clients — Bilateral and club loan market active for corporates, infrastructure assets and
Slide 41: New businesses: Orion Securities
For personal use only New businesses Orion Securities What we acquired: — 130 executives in 3 offices — Canadian corporate advisory (including ECM), equity research, sales and trading platform — Expanded our industry / sector coverage Securities business integrating well with existing Macquarie
Slide 42: New businesses: Giuliani Capital Advisors
For personal use only New businesses Giuliani Capital Advisors What we acquired: — 100 executives in 6 offices — expertise in restructuring advisory — expanded our industry expertise in corporate advisory (industrials, financial services) Integrating well with existing Macquarie Capital Advisers
Slide 43: Macquarie Capital Advisers
For personal use only Macquarie Capital Advisers Expect deal volume to exceed the record FY07 $A160b worth of deals Still a reasonable pipeline of M&A opportunities despite market uncertainty Offshore offices now provide the majority of division revenue, and continue to grow their contribution
Slide 44: Macquarie Capital balance sheet
For personal use only Macquarie Capital balance sheet Since 1 April 2007, Macquarie Capital has sold $A2b* worth of investments to a combination of third party investors, Macquarie-managed funds and listed market sales The current balance sheet reflects continued strong acquisition activity thro
Slide 45: Long term performance of Mac Cap Funds
For personal use only Long term performance of Mac Cap Funds 1900 Compound annual return since inception1 1700 31 Jan 08 MIG 14.9% 1500 MAp 22.6% MCG 16.3% MacCap listed 1300 funds composite Index - Rebased to 100 All Mac Cap Funds 17.3% index2 1100 900 700 S&P/ASX 500 200 S&P 500 300 FTSE 100 100 D
Slide 46: Underlying assets continue to perform well
For personal use only Underlying assets continue to perform well Delivering earnings and distribution growth for investors Distribution Fund1 (cents per security) Assets proportionate EBITDA compared to prior corresponding period5 2004 2005 2006 2007 CAGR 21.3% MIG 7.5 7.52 21 20 39% 14% 13.4% MAp 1
Slide 47: Growth in funds under management
For personal use only Growth in funds under management EUM $Ab AUM $Ab 60 140 $A7b in new capital raisings YTD (funds & consortia) Equity under management up 2% YTD to $A56.3b 120 50 Negatively impacted by appreciation in AUD (8% vs USD, 7% 100 40 vs GBP) over the same period Assets under ma
Slide 48: Fund Raising Pipeline
For personal use only Fund Raising Pipeline New fund pipeline Macquarie European Infrastructure Fund III Macquarie Infrastructure Partners II (North America) Macquarie Global Opportunities Partners (Private Equity) ADCB Macquarie Infrastructure Fund (Middle East) Macquarie Special Situatio
Slide 49: Debt maturity profile
For personal use only Debt maturity profile Less than 2% of the debt of Mac Cap Asset Debt scheduled for refinancing Funds* managed assets requires 20% refinancing in the next 12 months* 15% Debt still available on good terms for quality 15% assets — £900 million bonds issued by Thames 10% Water
Slide 50: Macquarie Capital Securities
For personal use only Macquarie Capital Securities Australia — Continues to operate as a highly profitable business with solid market share — Volumes well up on prior corresponding period Asia — Continues to grow through increased volumes and market share South Africa — Commissions well up on
Slide 51: Macquarie Capital Products
For personal use only Macquarie Capital Products Successful raising of reFleXion in December 2007 New infrastructure equities funds established in Asia and Europe Closed a new German closed-end fund Acquired aircraft leasing assets in the US Continue to pursue opportunities in the renewabl
Slide 52: Macquarie Capital Finance
For personal use only Macquarie Capital Finance Total managed and funded assets exceed $A7b in December 2007 Acquired CIT Systems Leasing — One of the largest independent lessors of equipment in North America — Approximately $US750m of lease assets Innovative customer solutions — Sale and leas
Slide 53: Q&A
For personal use only Q&A Nicholas Moore Group Head Macquarie Group Limited Operational Briefing 6 February 2008 – Presentation to Investors and Analysts
Slide 54: Financial Management Update
For personal use only Financial Management Update Greg Ward – Chief Financial Officer Macquarie Group Limited Operational Briefing 6 February 2008 – Presentation to Investors and Analysts
Slide 55: Corporate restructure
For personal use only Corporate restructure Restructure successfully implemented — Objectives of restructure have been achieved Macquarie Group well funded — Syndicated loan facility successfully closed in November 2007: 46 banks have participated in the syndicate; facility upsized from $A8b to
Slide 56: Macquarie Bank International Limited
Macquarie Bank International Limited UK Bank For personal use only Authorised to conduct banking activities in the UK and Europe effective 4 February 2008 Reflects growing presence overseas and provides flexibility for future international growth Macquarie Bank International (MBI) licensed for
Slide 57: Capital
For personal use only Capital Overall capital position Regulatory Capital — Remain well positioned to ($Ab) capitalise on potential $10 opportunities in the current $9 environment $8 — Capacity for a MQG hybrid issue $7 of circa $A750m, no current requirement $6 — Do not anticipate a need for an $
Slide 58: Regulatory capital
For personal use only Regulatory capital Macquarie Group regulatory capital requirements — Internal minimum regulatory capital requirements (‘Level 3 MCR’) calculated as the sum of the dollar value of: — MBL’s minimum Tier 1 capital requirement, based on a percentage of RWAs plus Tier 1 deductions
Slide 59: Regulatory capital position
For personal use only Regulatory capital position Macquarie remains well positioned to fund growth and to capitalise on suitable strategic opportunities in the current environment Macquarie Group Limited – Regulatory Capital Position (31 December 2007) MBL Group Minimum Capital Requirement Non-ADI
Slide 60: Liquidity and funding
For personal use only Liquidity and funding Well funded Key principles: — Conservative approach — Diversity of funding sources is a key objective of the Group’s liquidity approach including diversity by product, geography, tenor and currency — Concentration limits to ensure a good spread of matu
Slide 61: Term funding programmes in place
For personal use only Term funding programmes in place As noted MQG raised $A9b in term funding via a Senior Credit Facility with an average credit spread across the facility of approx. 50 bps. This Facility, of which $A5b remains undrawn includes; — $A1.6b in Standby Facilities — $A2.4b in Revolv
Slide 62: Recent funding market experience
For personal use only Recent funding market experience Category Funding source Experience Current approx. increased spread compared to pre-Aug 2007 levels (bps) Franchise Domestic Retail Up 35% since Aug 2007 to $A6.2b at Dec 2007 0-20 Deposits Short term Domestic Negotiable Up 64% since Aug 200
Slide 63: Dividends
For personal use only Dividends Previous MBL dividend policy will continue for MQG Target annual payout ratio of 50 - 60% Long term franking rate of at least 80% expected — expect 100% franking rate for the next two years DRP to continue 63
Slide 64: Q&A
For personal use only Q&A Greg Ward – Chief Financial Officer Macquarie Group Limited Operational Briefing 6 February 2008 – Presentation to Investors and Analysts
Slide 65: Real Estate Group
For personal use only Real Estate Group Stephen Girdis Group Head Macquarie Group Limited Operational Briefing 6 February 2008 – Presentation to Investors and Analysts
Slide 66: Diversity of revenue and funding sources
For personal use only Diversity of revenue and funding sources Real Estate Group Operates Through Two Divisions Real Estate Capital – Fund and Principal Activity Revenue Sources: New Fund Sponsor & Equity Raising Fees Fund / Property Management Fees Performance Fees Principal Returns from
Slide 67: Multiple investment strategies
For personal use only Multiple investment strategies Developed Markets Many niche strategies Core Real Estate Flexibility in investing Listed & Unlisted strategies: Office Listed / Unlisted Retail — In partnership or Entity Investment Industrial Development of Assets in-house Development Office
Slide 68: Large and rapidly growing platform of skills
Large and rapidly growing platform of skills For personal use only Approx 1,300 staff (MQG 570, Associates 730) in 31 locations within 15 countries Up 30% - 300 (MQG 100, Associates 200) from 31 March 2007 Japan UK USA China South Korea Macquarie Real Macquarie Real Estate Macquarie Real E
Slide 69: Assets under management growing while realising value for investors
Assets under management growing while realising value for investors For personal use only Real Estate assets under management (incl associates) up 38% to A$32.5b, after $A7.8b of additions, $A4.3b of assets committed but not settled and $A3.2b of disposals Big shift to unlisted capital MPR 32.5
Slide 70: Real estate markets update
For personal use only Real estate markets update Investors to target higher growth markets Cost of capital has increased GDP Market Comments 2008-2010 China 9.8% Strong growth, but very difficult to invest 9.0% with volume. Low transparency Growth India Singapore 5.8% Growth markets with hig
Slide 71: Funds - two thirds exposed to Asia/Australia
Funds - two thirds exposed to Asia/ Australia For personal use only Big shift to Asia and away from US across the funds Total Assets under Management* December 2006 - A$23.2 billion December 2007 - A$32.5 billion** Australia Australia North America 23% 24% North America 29% 49% Asia Europe 20% 7% As
Slide 72: Diversified balance sheet
For personal use only Diversified balance sheet 48% Loans, 23% Listed REITs, balance in diverse equity portfolio of unlisted funds, principal positions and development Macquarie Real Estate’s Balance Sheet Commitments December 2007 – A$4.2 billion Unlisted REITs Development - Australia Development -
Slide 73: Real Estate Group - results overview
For personal use only Real Estate Group - results overview Before any potential provisions on investments in real estate funds, expect FY08 to be in line with pcp (excluding Goodman Group realisation in pcp) Major second half contributions include: — Income recognised from establishing the Korea
Slide 74: Real Estate Group – initiatives overview
For personal use only Real Estate Group – initiatives overview Australia and Asia Macquarie Direct Property Fund – has had continued strong equity inflows and completed the acquisition of its first international direct asset – Singapore office Macquarie Global Property Advisors well positioned t
Slide 75: Real Estate Group – initiatives overview
For personal use only Real Estate Group – initiatives overview Europe and US US CMBS team established to take advantage of current real estate debt market opportunities, including the establishment of a High Yield Debt Fund, and to expand capital market expertise Macquarie CountryWide Trust disp
Slide 76: REIT markets update
For personal use only REIT markets update Global REITs ex. HK following the US down The decline in REIT pricing is global (ex-Hong Kong) and Macquarie REITs have been adversely impacted. 120 110 Macquarie’s Australian Listed REITs 100 MLE outperforming the wider REIT market, MOF and MCW 90 perform
Slide 77: Strategic listed REIT investments
Real Estate Group’s strategic listed REIT investments For personal use only Strategic investments in Macquarie’s Investment @ Market Value Current REITs managed by ownership Cost* 31/1/2008 @ 31/1/2008 Published NTA Macquarie and associates % $Am $Am Value $Am MCW 10 257 192 271 MOF 7 221 153 212 ML
Slide 78: Looking Forward
For personal use only Looking Forward Well positioned to take advantage of current opportunities globally over the medium term Continued investment in growing the range and size of specialised skills and investment strategies No significant credit issues Well positioned in solid markets in Asi
Slide 79: Q&A
For personal use only Q&A Stephen Girdis Group Head Macquarie Group Limited Operational Briefing 6 February 2008 – Presentation to Investors and Analysts
Slide 80: Equity Markets Group
For personal use only Equity Markets Group Kim Burke – Group Head Macquarie Group Limited Operational Briefing 6 February 2008 – Presentation to Investors and Analysts
Slide 81: Business overview
Business overview Equity Markets Group For personal use only Activities Equity Products - equity derivative products, sales and trading Fund Products - hedge fund management and related products Global equity finance - securities borrowing and lending Alternative strategies JV - services for
Slide 82: Operational highlights
Operational highlights All Divisions continuing to grow For personal use only Staff Numbers Compound growth in staff of 23% over 6 years to FY08E Permanent staff Revenue ($A) FY03 FY04 FY05 FY06 FY07 FY08E Equity Markets Revenue Compound growth in revenue of 50% over 6 years to FY08E 82
Slide 83: Operational highlights: Equity Markets Group
Operational highlights Equity Markets Group For personal use only Generally much more challenging business environment in 2H08 compared with extremely favorable market conditions in 1H08 — Impact of global debt crisis spreading to equity markets — Greater uncertainty and equity market volatility,
Slide 84: Equity Products Division
Equity Products Division Asian structured products volumes are declining For personal use only Equity Products maintaining strong market positions in listed and unlisted products in Australia and Asia EMG Asia – structured product volumes by month Mar-07 May-06 Jun-06 Jul-06 Nov-06 Jan-07 May-07 J
Slide 85: Fund Products Division
Fund Products Division Strong growth in funds under management For personal use only Funds under management increased 79% to $A2.7b since 1 April 2007 Funds under risk management increased 19% to $A3.4b in same period Fund Products experiencing challenging market conditions in the second half,
Slide 86: Global Equity Finance
Global Equity Finance Covering more markets and clients For personal use only Global Equity Finance continuing to grow client base and lending volumes, particularly in USA and Europe EMG – Securities borrowing and lending volumes by month May-06 May-07 Aug-06 Aug-07 Apr-06 Nov-06 Mar-07 Apr-07 Nov
Slide 87: Alternative Strategies Division
Alternative Strategies Division Volumes continuing to grow For personal use only Alternative Strategies JV continuing to broaden product and service offering, volumes increasing month on month ASD – Access product volumes by month Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-
Slide 88: Looking ahead
Looking ahead Market conditions continue to be challenging For personal use only Business Conditions Crisis of confidence in debt markets has spread to global equity markets and is likely impact the real economy Expecting a period of high equity market volatility followed by declining demand for
Slide 89: Looking ahead
Looking ahead Revenue diversity and a scalable platform For personal use only EMG Strategy Build scalable and robust platforms to deliver EMG’s products and services to clients globally Significantly upgrade back office and IT infrastructure to improve client service, reduce operational risk and
Slide 90: Looking ahead
Looking ahead Revenue diversity and a scalable platform For personal use only Fund Products Increasingly Asian based product offering Continue to grow thematic long only retail funds in Asia Absolute return funds focusing on enhancing successful flagship offerings Leverage the strong perform
Slide 91: Q&A
For personal use only Q&A Kim Burke – Group Head Macquarie Group Limited Operational Briefing 6 February 2008 – Presentation to Investors and Analysts
Slide 92: Risk Management Group
For personal use only Risk Management Group Nick Minogue – Group Head Macquarie Group Limited Operational Briefing 6 February 2008 – Presentation to Investors and Analysts
Slide 93: 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, and apply a stress test approach in all risk types Str
Slide 94: Macquarie's management approach
Macquarie’s management approach Freedom within Boundaries For personal use only Within Macquarie’s risk framework the aim is to give business heads a high level of entrepreneurial freedom to develop and implement business unit strategy, new products and services, new market initiatives and domesti
Slide 95: 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 96: Risk culture at Macquarie
For personal use only Risk culture at Macquarie We don’t seek to predict when markets may turn down, but to manage the business constantly on the basis it could be tomorrow Risks assessed on a ‘worst case’ basis using earnings shock, rather than capital loss, as the yardstick All material risk
Slide 97: Risk Management Group staff
For personal use only Risk Management Group staff RMG Staff Managing Director Board Audit & Compliance Committee Risk Management Group RMG Central RMG RMG RMG RMG RMG Internal Audit Credit Prudential, Operational Risk Compliance QAD Credit Capital Operational Risk Regulatory Quant. Applications Inte
Slide 98: Market risk and credit risk
For personal use only Market risk and credit risk Aggregate Market Risk Significant increase in market risk 40.00 during 2007 VAR (1-day 99%) Increased risk due to increased 20.00 volume and trading activity, particularly in Asian equities and physical commodities 0.00 Jul-05 Jul-06 Jul-07 Jan-0
Slide 99: Managing risk and offshore expansion
For personal use only Managing risk and offshore expansion Experience of managing a growing business — Macquarie has been on a long term growth path — Managing growth is part of management’s experience — Varying structures and methods in response to changes in scale is a familiar task Strategic
Slide 100: Growth of RMG resources
For personal use only Growth of RMG resources 12,000 700 600 10,000 Finance & RMG Headcount Macquarie-wide Headcount 500 8,000 400 6,000 300 4,000 200 2,000 100 0 0 2002 2003 2004 2005 2006 2007 Macquarie Headcount RMG Headcount Finance Headcount 100
Slide 101: Basel II Regulatory Capital Impact
For personal use only Basel II Regulatory Capital Impact Macquarie Bank has received accreditation from APRA for the Foundation Internal Ratings Based approach to credit risk and the Advanced Measurement Approach to operational risk Under Basel II the total credit risk regulatory capital require
Slide 102: 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, but not beyond historic levels and not beyond levels we plan for Few of Macquarie’s stress tests have been exceeded. However, we have r
Slide 103: Our success has been sustained
Our success has been sustained 39 year history of profit For personal use only 1600 1500 1400 Profit for 1300 1H08 MGQ Gains $m 1200 Net Profit After Tax 1100 3 1000 $Am 900 800 2 700 600 1 500 400 300 0 200 69 71 73 75 77 79 100 0 69 75 81 87 93 99 '05 103
Slide 104: Q&A
For personal use only Q&A Nick Minogue – Group Head Macquarie Group Limited Operational Briefing 6 February 2008 – Presentation to Investors and Analysts
Slide 105: Glossary
For personal use only Glossary $A Australian Dollar $C Canadian dollar $HK Hong Kong dollar $US / USD United States Dollar ₤ United Kingdom Pound € Euro 1H08/1H2008 Half year ended 30 September 2007 1Q08 3 months ended June 2007 2H07/2H2007 Half year ended 31 March 2007 2H08/2H2008 Half year ending
Slide 106: Glossary
For personal use only Glossary ATM Automatic Teller Machine AUD Australian dollar AUM Assets Under Management. Calculated as the proportional ownership interest in the underlying assets of funds and mandated assets that Macquarie actively manages for the purpose of wealth creation, adjusted to exclu
Slide 107: Glossary
For personal use only Glossary FIRB Foreign Investment review Board FMG Funds Management Group FOF Fund of Funds FSA Financial Services Authority UK FSG Financial Services Group FUA Funds Under Administration FUM Funds Under Management FX Foreign Exchange FY Full year FY08 Full year ending 31 March
Slide 108: Glossary
For personal use only Glossary IT Information Technology J-REP Japanese logistics property company JV Joint Venture KIEF Kagiso Infrastructure Empowerment Fund KRW South Korean Won KRX Korea Stock Exchange LHS Left hand side M&A Mergers and Acquisitions MacCap Macquarie Capital MAp Macquarie Airport
Slide 109: Glossary
For personal use only Glossary MEIF/MEIF II/MEIF III Macquarie European Infrastructure Fund /Macquarie European Infrastructure Fund II/Macquarie European Infrastructure Fund III MGA Macquarie Goodman Asia MGL Macquarie Group Limited MGOP Macquarie Global Opportunities Partners MGPA Macquarie Global
Slide 110: Glossary
For personal use only Glossary MPT Macquarie Power & Infrastructure Income Fund MQG Macquarie Group Limited MREEF Macquarie Real Estate Equity Funds MWREF Wholesale Fund - Chinese retail assets n/a Not applicable NOHC Non-operating holding company NPAT Net Profit After Tax NYSE New York Stock Exchan
Slide 111: Glossary
For personal use only Glossary RWA Risk-Weighted Assets S&P Standard and Poor’s SAIF South Africa Infrastructure Fund SGX Singapore Exchange SIV Structured Investment Vehicle TCG Treasury and Commodities Group TSE Tokyo Stock Exchange UK United Kingdom US United States USCP US Commercial Paper WA We
Macquarie Group — Investor Presentation (February 2008) on 6ix