Macquarie Group, Ltd. · ASX:MQG
Macquarie — Investor Presentation (February 2013)
76 slides from Macquarie's investor presentation, Feb 5, 2013
Slide 1: Operational Briefing
Macquarie Group Limited For personal use only Operational Briefing Presentation to Investors and Analysts 5 February 2013
Slide 2: Disclaimer
Disclaimer For personal use only The material in this presentation has been prepared by Macquarie Group Limited ABN 94 122 169 279 (Macquarie) and is general background information about Macquarie’s activities current as at the date of this presentation. This information is given in summary form and
Slide 3: Agenda
Agenda For personal use only 10:00 – 10:10 Introduction – Stuart Green 10:10 – 10:30 Update since the interim result announcement – Nicholas Moore 10:30 – 11:00 Macquarie Funds Group – Shemara Wikramanayake 11:00 – 11:30 FICC – Andrew Downe 11:30 – 12.00 Macquarie Capital – Tim Bishop 3
Slide 4: Update since the Interim Result Announcement
For personal use only Update since the Interim Result Announcement Nicholas Moore Managing Director and Chief Executive Officer Macquarie Group Limited Operational Briefing 5 February 2013 – Presentation to Investors and Analysts 4
Slide 5: About Macquarie
About Macquarie Building for the medium term For personal use only Top 50 global asset manager with $A334b1 of assets under management Macquarie Provides clients with access to a diverse range of capabilities and products, including infrastructure and real asset management, securities Funds inve
Slide 6: 3Q13 Overview
3Q13 Overview For personal use only Since our 1H13 result announcement, market conditions have shown some signs of improvement, however client activity remains subdued for capital markets facing businesses Macquarie’s annuity-style businesses (Macquarie Funds, Banking and Financial Services and
Slide 7: Overview: Annuity-style businesses
Overview Annuity-style businesses For personal use only Operating Group Market positions Developments since 1H13 – Top 50 global asset manager, Australia’s largest global asset manager – Ranked first in Infrastructure Investor magazine's list of top infrastructure investors1 globally and received th
Slide 8: Overview: Capital market facing businesses
Overview Capital market facing businesses For personal use only Operating Group Market positions Developments since 1H13 – No.2 overall research and sales strength for Australian institutional investors1, No.1 − Awarded $US200m of China QFII quota5 for Asian institutional investors1and No.1 for US/E
Slide 9: FY13 outlook
FY13 outlook For personal use only Summarised below are the outlook statements for each Operating Group FY13 results will vary with market conditions, particularly the capital markets facing businesses which continue to experience subdued market conditions Net profit contribution FY07- FY12 FY07
Slide 10: FY13 outlook
FY13 outlook For personal use only Subject to market conditions, FY13 net profit contribution from operating groups expected to be materially up on FY12 FY13 contribution from Corporate expected to be down on FY12 due to the net impact of a number of items including the receipt of $A295m from Sy
Slide 11: 13,549 staff in over countries
13,5491 staff in over 28 countries For personal use only EUROPE, MIDDLE EAST ASIA AMERICAS & AFRICA2 Staff: 1,184 Staff: 2,945 Staff: 3,267 AUSTRALIA3 Staff: 6,153 1. Staff numbers as at 31 Dec 12. 2. Excludes staff in Macquarie First South joint venture and staff seconded to Macquarie Renaissance j
Slide 12: Funded balance sheet remains strong
Funded balance sheet remains strong For personal use only Macquarie Group Limited $Ab $Ab $Ab 90 31 March 2012 90 3031 September 2012 March 2012 31 September 30 December 2012 90 ST wholesale ST wholesale ST wholesale issued paper (6%) issued paper (6%) issued paper (7%) 80 80 Other debt1 maturing in
Slide 13: Stable Basel III capital surplus
Stable Basel III capital surplus For personal use only Harmonised Basel III Banking Group capital ratios at Dec 12 Common Equity Tier 1: 11.3%; Tier 1: 12.3% $Ab Group regulatory surplus: Basel III (Dec 12) 5.0 4.5 4.0 4.3 0.1 (0.1) (0.1) 4.2 (1.2) 3.5 3.0 2.5 3.0 Based on 8.5% 2.0 (minimum Tier 1
Slide 14: Medium term
Medium term For personal use only Macquarie remains well positioned to deliver superior performance in the medium term Deep expertise in major markets Build on our strength in diversity and continue to adapt our portfolio mix to changing market conditions Annuity-style income is provided by th
Slide 15: Approximate business Basel III & ROE
Approximate business Basel III & ROE For personal use only APRA Basel III Capital Approx. 1H13 Return Operating Group @ 8.5% ($Ab) on Ordinary Equity1 Approx. 6-Year Average Annuity-style businesses (excluding legacy) Return on Ordinary Equity1 Macquarie Funds Group 1.6 Corporate and Asset Finance 2
Slide 16: Medium term
Medium term For personal use only Annuity-style business that is diversified across regions, products, asset classes and investor types MFG Well positioned for organic growth with several strongly performing products and an efficient operating platform Any improvement in market confidence shou
Slide 17: Macquarie Funds Group
For personal use only Macquarie Funds Group Shemara Wikramanayake Group Head Macquarie Group Limited Operational Briefing 5 February 2013 – Presentation to Investors and Analysts 17
Slide 18: Significant global funds business
Macquarie Funds Group Significant global funds business For personal use only $A334b 20 $A356m 1H13 net profit AUM Countries contribution1 Top 50 ~1,400 Global asset manager Staff MFG is a significant funds business, with global reach and a breadth of capabilities All figures as at 31 Dec 12, unless
Slide 19: Broad capability set
Macquarie Funds Group Broad capability set For personal use only Macquarie Infrastructure Macquarie Investment Macquarie Specialised and Real Assets Management Investment Solutions Alternative asset Securities investment Fund and equity-based management including: management across: solutions includ
Slide 20: Wide reach across the globe
Macquarie Funds Group Wide reach across the globe For personal use only EMEA AMERICAS ~180 staff ~640 staff Austria Luxembourg France Russia Brazil Canada Germany Switzerland Mexico United States Great Britain UAE Asia ~160 staff China Singapore Japan Philippines Hong Kong Korea India Australia ~460
Slide 21: Macquarie approach
Macquarie Funds Group Macquarie approach For personal use only The best of an The best of a institutional environment boutique environment World class operational support, Alpha-generating teams structured with strong risk management like autonomous boutiques Global distribution effort Entrepreneuri
Slide 22: Macquarie Infrastructure and Real Assets
Macquarie Infrastructure and Real Assets ~110 portfolio businesses, ~300 properties and ~3.5 million hectares of farmland1 For personal use only UK Spain Czech Republic Canada USA Japan Bristol Airport Asset Energia Solar Ceske Radiokomunikace Autoroute 25 AMC REIT Global Tower Partners
Slide 23: Two decades of experience
Macquarie Infrastructure and Real Assets Two decades of experience1 For personal use only AMERICAS EMEA ASIA AUSTRALIA2 2012 Macquarie Mexico REIT 2010 African Infrastructure Investment Fund 2 2012 Korea Private Concession Fund 2011/12 Awarded multiple separately managed (JV) accounts 2009 Macquarie
Slide 24: Deep, global team of ~400 experienced professionals
Macquarie Infrastructure and Real Assets Deep, global team of ~400 experienced professionals For personal use only Approximately 400 experienced professionals, located in 20 countries, managing 49 funds1 Largest infrastructure Largest Best Infrastructure $A40 billion of Equity Under Management2
Slide 25: Superior performance
Macquarie Infrastructure and Real Assets Superior performance For personal use only MIRA is predominantly a long-term investor. Since inception MIRA-managed funds have: Invested in 37 Currently invested over 140 infrastructure asset in ~320 real estate, infrastructure realisations to energy and busi
Slide 26: Capital creation two times larger than closest peer
Macquarie Infrastructure and Real Assets Capital creation two times larger than its closest peer for infrastructure investment globally For personal use only 2012 Top global infrastructure investors1 5 Year Capital 5 Year Capital 1 1 Rank Company Creation Rank Company Creation $USb $USb 1 Macquarie
Slide 27: Strong organic growth continues in every region
Macquarie Infrastructure and Real Assets Strong organic growth continues in every region For personal use only $A4.0 billion $A3.7 billion $A1.3 billion New equity commitments in FY13YTD Equity invested in FY13YTD Asset realisations in FY13YTD AMERICAS EMEA ASIA AUSTRALIA Over $A1.2b of equity inv
Slide 28: Long history, with diverse client base
Macquarie Investment Management Long history, with diverse client base across regions and asset classes For personal use only With $A230b in AUM1, MIM has been managing assets for institutional and retail investors since 1980 in Australia and 1929 in the US2 ~25 teams offering over 100 specialis
Slide 29: Industry recognition and awards
Macquarie Investment Management Industry recognition and awards For personal use only History of strong performance across a range of capabilities Delaware Investments ranked first in 2011 Won 10 Lipper Awards in 2012 for superior “Barron’s Fund Families Report” based on performance3 one year perf
Slide 30: Delaware Investments – consistently strong performance
Macquarie Investment Management Delaware Investments – consistently strong performance since acquisition For personal use only Three years after acquisition, Delaware Investments’ AUM1 and run rate revenues are at an all time high Continuing to strengthen US presence, with: – Strong net inflows
Slide 31: Strong and growing cross sales across MIM
Macquarie Investment Management Strong and growing cross sales across MIM1 For personal use only MIM is successfully distributing a range of products in new jurisdictions across the globe Now managing more than $A12b of cross-border AUM1, including the following cross-sales: Client to product As
Slide 32: Growth strategy
Macquarie Investment Management Growth strategy For personal use only MIM’s primary focus is on executing an organic growth strategy – Growing assets in existing suite of capabilities – Adjacent expansion through product development and smaller lift-outs and bolt-ons The recent rise in valuation
Slide 33: Overview of recent initiatives
Macquarie Specialised Investment Solutions Overview of recent initiatives For personal use only Macquarie Specialised Investment Solutions (MSIS) is recognised for product innovation, with a strong track record of delivering tailored solutions to the market in a timely fashion MSIS has commenced
Slide 34: Conclusions
Conclusions For personal use only Strong global asset management platform with a diverse range of products and services across the three Macquarie Funds Group divisions Significant scope for continued organic growth – Adjacent expansion – Focusing on product gaps Continue to explore selective
Slide 35: References
References For personal use only Slide 24 – Macquarie Funds Group Statistic Footnote 3 Infrastructure Investor award Rankings based on methodology created by Infrastructure Investor, and represents infrastructure direct-investment capital formed since 1 January 2007. 4 Towers Watson award Global Alt
Slide 36: References
References For personal use only Slide 25 (Continued) – Macquarie Funds Group Statistic Footnote 1.9x the equity As at 31 December 2012. Calculated as the aggregate of all realised proceeds divided by equity invested, across all realised infrastructure portfolio businesses to invested by the third p
Slide 37: References
References For personal use only Slide 29 – Macquarie Funds Group Footnote 1 Barron’s is a trademark of Dow Jones, L.P. all rights reserved. For 1-year performance, Delaware Investments ranked 1st out of 58 firms for 2011. For 5-year performance, Delaware Investments ranked 5th out of 53 firms for 2
Slide 38: Fixed Income, Currencies and Commodities (FICC)
For personal use only Fixed Income, Currencies and Commodities (FICC) Andrew Downe Group Head Macquarie Group Limited Operational Briefing 5 February 2013 – Presentation to Investors and Analysts 38
Slide 39: Overview
Overview For personal use only FICC is a diverse portfolio of businesses which has evolved via a strategy of building adjacencies from core businesses The platform is weighted more heavily towards commodities compared to peers Consistently good returns, even in down markets The ability to ad
Slide 40: FICC is a portfolio of businesses across commodity and financial markets
FICC is a portfolio of businesses across commodity and financial markets For personal use only COMMODITY MARKETS FINANCIAL MARKETS PHYSICAL & FINANCIAL PRIMARY & SECONDARY Ag Metals Energy FX Rates Credit Metals & Agriculture Energy Sales and Trading Markets Fixed Income Credit & Currencies Trading
Slide 41: FICC's business is diverse
FICC’s business is diverse – the platform spans 25+ markets globally For personal use only COMMODITIES FINANCIAL CROSS DIVISIONAL Energy Metals Agriculture FX & Rates Credit Futures Central Capability Sales and trading of physical and financial Sales and trading of primary Execution Structur
Slide 42: Around-the-clock coverage of its markets
FICC provides around-the-clock coverage of its markets ~950 staff in 14 countries For personal use only LONDON hub SINGAPORE hub Full complement Building up commodities coverage of offering, including financials and Middle East commodities presence Building up AMERICAS coverage of ~440 staff EMEA fi
Slide 43: FICC's strategy: building adjacencies from core businesses
FICC’s strategy has involved predominantly building adjacencies from core businesses For personal use only Environmental product trading Started commodities Structured Purchased Integrys platform Commodity wholesale electronic Finance marketing and trading Futures execution Credit Trading portfolio
Slide 44: Growth initiatives across both mature and niche businesses
Growth initiatives across both mature and niche businesses For personal use only Division Stage of evolution Growth initiatives Metals & Energy Established Grow lending COMMODITIES Capital Energy Markets Established Consolidate investments Mature & Grow European power broad Metals & Agriculture Esta
Slide 45: Average tenure of FICC senior leaders
The average tenure of FICC senior leaders provides platform stability and underpins execution For personal use only 20 19 Average tenure of senior leaders is 9 years, 25% of FICC staff 15 12 Years 10 7 6 5 4 0 ED DD AD NDIR FICC Management Team As at Dec 12. Tenure includes years served prior to Mac
Slide 46: Growing customer base and strong customer retention
Growing customer base and strong customer retention For personal use only Snapshot of counterparties (December 2012) Energy Markets customer progression (number of counterparties) ~60% OF COUNTERPARTIES THAT TRADED WITH MACQUARIE IN DECEMBER HAVE TRADED A ~75% increase in number of active MINIMUM 16
Slide 47: Commodities platform ranks amongst the top IBs globally
Our commodities platform ranks amongst the top IBs globally For personal use only 2011 Commodities Revenue ($US) Expertise and scale 30+ years in metals markets 20+ years in agricultural markets 10+ years in energy markets Consistently ranked #4 physical gas marketer in North America1 Top 3 carbon e
Slide 48: Investments in physical capabilities provide strategic advantages
Investments in physical capabilities provide strategic advantages For personal use only ENERGY (PHYSICAL) AGRICULTURE (PHYSICAL) Active across all physical energy products: ‒ 2007: Lansing Trade Group NATURAL GAS POWER LNG ‒ Focus: grains, feed ingredients, agricultural US, Canada, UK US, UK, Aust.
Slide 49: Growth initiatives: Commodity Investor Products
Growth initiatives: Commodity Investor Products For personal use only CIP rounds out FICC’s global commodities platform Commodity-based index products Institutional investors globally ‒ Total Beta and Alpha commodity index funds: $US297b1 Natural adjacency to existing commodity platform stre
Slide 50: Growth initiatives: Asia
Growth initiatives: Asia For personal use only GAINING MOMENTUM AS A CURRENT FOCUS REGIONAL PLAYER FICC Asian regional hub established in Commodity markets Singapore Extend established Energy Markets and MAST 140+ people in 7 countries franchise into Asia Key new products established: credit
Slide 51: Growing presence in Asia
Growing presence in Asia For personal use only Asia operating income 7.7% Asia operating income (% of FICC total operating income) 6.2% 1.7% 1.3% FY09 FY10 FY11 FY12 51
Slide 52: Current market conditions are mixed
Current market conditions are mixed For personal use only COMMODITY MARKETS FINANCIAL MARKETS Weak investor sentiment and depressed FX volatility continues to decline but improved rates resource equity markets resulting in volatility on the back of interest rate cuts in Australia impairments on
Slide 53: Structural changes occurring across the industry
Structural changes occurring across the industry For personal use only Regulation/ Key points Potential implications challenge DODD-FRANK Centralised clearing of OTC derivatives Increased transparency and narrowing of Migrate standardised OTC derivatives onto spreads as derivative products are
Slide 54: FICC's consistency of earnings
FICC’s consistency of earnings drives long-term success and stability For personal use only FICC Net Profit Contributions1 – FY07-FY12 ($A) $827m $635m $602m FY07-FY12 average: $A615m $575m $539m $509m Consistency of earnings is a key differentiator for FICC Longevity is predicated on strong and
Slide 55: Summary
Summary For personal use only FICC’s track record suggests that it will continue to generate attractive and consistent returns for Macquarie Historic returns Consistently good returns, even in down markets The management team’s continual focus on innovation, evolution and capturing Innovation ne
Slide 56: Macquarie Capital
For personal use only Macquarie Capital Tim Bishop Group Head Macquarie Group Limited Operational Briefing 5 February 2013 – Presentation to Investors and Analysts 56
Slide 57: Macquarie Capital at a glance
Macquarie Capital at a glance Playing to our strengths For personal use only Macquarie Capital’s strategy: 1 A tailored approach: Focused on regions and sectors where strong specialist capabilities deliver client value and maximum profit potential 2 Combining advice with access to capital: Risk appe
Slide 58: Overview of Macquarie Capital
Overview of Macquarie Capital Four core activities across six industry groups For personal use only Equity Capital Debt Capital Capital M&A Advisory Markets Markets Deployment Infrastructure, Utilities Merger, Equity Loan and bond Deployment of and Renewable Energy acquisition and underwriti
Slide 59: Overview of Macquarie Capital: 1,110 staff globally
Overview of Macquarie Capital 1,110 staff globally1 For personal use only Europe 163 staff Amsterdam London Dublin Madrid Canada Frankfurt 86 staff Calgary Vancouver Toronto Asia 208 staff Bangkok Mumbai Beijing Seoul Hong Kong Shanghai Jakarta Singapore Kuala Lumpur Tokyo Manila US & Mexico 321 sta
Slide 60: Cyclical impact on Macquarie Capital in Asia Pacific
Changes since last operations briefing Cyclical impact on Macquarie Capital in Asia Pacific For personal use only Key market data Impact on Macquarie Capital in Asia CY2009 vs CY2012 Pacific Revenue has been affected by downturn in Asia 71% Pacific market activity since March 2010 ANZ ECM Propor
Slide 61: Structural changes to Macquarie Capital
Changes since last operations briefing Structural changes to Macquarie Capital For personal use only Continued diligence on cost containment Cost reduction Total staff numbers reduced from 1,5451 to 1,110 Industry group Revenue distribution broadly consistent with FY10 revenue distribution I
Slide 62: Macquarie Capital's strategy
Macquarie Capital’s strategy Focusing on our strengths For personal use only Selected staff metrics reflect tailored approach by region and industry Percentage of global Macquarie Capital headcount ~65% ~10% of total staff are located in Australia and of total staff are in the Real Estate New Zealan
Slide 63: Australia & New Zealand
Australia & New Zealand Full service offering For personal use only Selected clients and transactions Fully integrated offering across all sectors ‒ Advised on the successful $A2.9b APA Strengthening the team and geographical cover: Group off-market takeover of Hastings Diversified Utilities Fun
Slide 64: Asia
Asia Cyclical downturn For personal use only Selected clients and transactions Wide regional coverage provides competitive ‒ Sole financial adviser to HKSE-listed China advantage China Gas Holdings on its successful defence of Gas Holdings a $US2.2b unsolicited offer ECM, particularly HK IPOs, h
Slide 65: US & Mexico
US & Mexico Upside potential For personal use only Selected clients and transactions Fully integrated product offering targeting emerging leaders in the mid-cap space and financial sponsors Elizabeth River ‒ Co-sponsor of, and exclusive financial adviser on the $US2.1b Downtown Strengths in DCM
Slide 66: EMEA and Canada
EMEA and Canada Selective focus For personal use only EMEA Canada Infrastructure business and strong German country Infrastructure and Resources (Oil & Gas and Metals & coverage are key strengths Mining) are two key pillars of business Growing presence in Resources - Oil & Gas; Metals Target
Slide 67: Infrastructure
Infrastructure Strongest global industry group For personal use only Selected clients and transactions Market leader in all key markets ‒ Joint financial adviser on $US1.9b Highstar acquisition of Veolia ES Solid Waste Acted on 7 of last 9 public private partnerships in Capital LLC ‒ Joint arran
Slide 68: Resources
Resources Key strength and clients recognise our ability in the space For personal use only Selected clients and transactions Strong specialist Resources team in Australia Additional senior hires internationally such that we Fortescue ‒ Advised on sale and purchase agreement Metals Group with Tr
Slide 69: Real Estate
Real Estate A leader in Real Estate Private Capital Markets For personal use only Selected clients and transactions Primary focus on growing global capabilities in ‒ $A1.75b shopping centre transaction AMP private equity capital, including forming and Capital with Westfield and associated $A872m a
Slide 70: Industrials, TMET and FIG
Industrials, TMET and FIG Selective focus For personal use only Telecommunications, Media, Industrials Financial Institutions Entertainment & Technology Strength of Asia Pacific franchise Increased share and activity in ANZ Focus on cross border and complex provides point of differentiation
Slide 71: Balance sheet activity
Balance sheet activity Recent highlights For personal use only Selected clients and transactions Invest across the capital structure, from equity to ‒ Commitment of preferred equity plus Audio Visual debt Services warrants to support Kelso & Co’s bid to Corporation Capital deployment is a compet
Slide 72: Summary
Summary Macquarie Capital’s approach: Playing to our strengths For personal use only A tailored approach by region and industry group focused on relative strengths Combining advice with our ability to deploy capital, ranging from equity to debt, enables us to deliver client value and maximum pro
Slide 73: Appendix: Glossary
For personal use only Appendix Glossary Macquarie Group Limited Operational Briefing 5 February 2013 – Presentation to Investors and Analysts 73
Slide 74: Glossary
Glossary For personal use only ~ Approximately CET1 Common Equity Tier 1 € Euro CIP Commodity Investor Products $A Australian Dollar CLO Collateralised Loan Obligation $C Canadian Dollar CY09 Calendar Year ended 31 December 2009 $US United States Dollar CY12 Calendar Year ended 31 December 2012 ABS
Slide 75: Glossary
Glossary For personal use only FY13 Full Year ended 31 March 2013 No. Number G10 Group of Ten Industrialised Nations NPAT Net Profit After Tax HK Hong Kong OTC Over The Counter HKSE Hong Kong Stock Exchange P&L Profit and Loss Insto Institutional Pcp Prior Corresponding Period IPO Initial Public Off
Slide 76: For personal use only
For personal use only 76
Macquarie Group — Investor Presentation (February 2013) on 6ix