08-May-2020: The following announcements have been released by MQG this morning:
At around $100/share, MQG look reasonable here. Not like the bargain prices we got down to during the GFC, but still decent levels. I don't consider their near-term upside to be AS good as other opportunities out there right now, so I don't hold them, but if I HAD to hold one Australian bank, Macquarie would be the one.
They derive more than 60% of their income from offshore now, and they are one of the world's largest asset managers. They are particularly big in global infrastructure asset management. The "Millionaires' Factory" is still evolving and finding new ways to make money. It's what they do. They are NOTHING like our big 4 banks, and don't have the same risk profile. There are certainly risks with MQG, but they are different risks. Their performance will be somewhat correlated with global sharemarket recoveries, particularly the US sharemarket. A deep global recession will hurt them. A global recovery will help them, and they'll outperform in that scenario.
Longer term investment - better case over Big 4 banks a 16.4% return on equity that remains well ahead the pack.
Strong case for both growth and yeild play
Market focused (performance liked to commodities + overall equity markets)
MQG has benefited from strong market conditions
Further AUD depreciation will continue to benefit
Nicholas Moore will retire as MD & CEO after a decade at the helm and be replaced by Shemara Wikramanayake, the current group head of Macquarie Asset Management.
Mr Moore will step down from the boards of Macquarie Group and Macquarie Bank effective November 30. Ms Wikramanayake, who was born in the UK before her family moved to Australia, becomes the only female CEO among Australia's 20 biggest companies by market value.
Shemara Wikramanayake will be the new boss of Macquarie.
Ms Wikramanayake will inherit a company that's transformed itself under Moore's stewardship from an Australian investment bank into a global asset manager that now earns more than two-thirds of its income overseas. Its asset management, financial services and corporate finance businesses now account for 70 per cent of earnings. Macquarie's share price has more than doubled under Mr Moore's tenure.
Ms Wikramanayake said she wanted to "perpetuate the legacy Nicholas leaves behind" and would be spending a lot of time working with him during the handover, and travelling to different parts of the business.
“I don’t feel any urgency to change, it’s not like when I stepped into asset management after the GFC," she said.
Ms Wikramanayake acknowledged she was a rarity as a senior woman in the finance sector and said more should be done to attract and retain women to the industry, including providing workplace flexibility to both men and women, and examining unconscious bias. However, she said Macquarie had a "wonderful culture".
“Macquarie in the 30 years I’ve been here has always been a meritocracy, I've never felt barriers," Ms Wikramanayake said. "I’ve never found inside Macquarie the quality of my ideas is judged on my gender, my ethnicity, my size, it's really about the quality of my ideas."
I expect that Macquarie's history of under-promising and over-delivering will most likely continue under Shemara's watch.
Glen Stevens, the ex-Governor of the Reserve Bank of Australia, is now officially a board member at MQG, having had his appointment ratified at today's AGM.