tim bishop presentation
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Macquarie in the Americas
Macquarie Group LimitedOperational Briefing8 February 2011 Presentation to Investors and Analysts
Tim BishopCountry Head - US
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Diversified group-wide capabilities
Income1 by Source - 6 months to 30 Sep 10
The American businesses contributed 27% of Macquaries total income in 1H11
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Institutional and retailcash equities
Equity derivatives
M&A and advisory income
Asset and equity investments
Commodities, resources andforeign exchange
Lending, leasing, fixed incomeand margin related income
Funds management
Macquarie Group worldwide Americas
1. Operating income before writedowns, impairments, equity accounted gains/(losses) and one-off items.
13%
34%
15%
14%
24%18%
5%
20%
9%11%
9%
28%
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Positioning for success in the Americas
A hybrid approach
Boutique / Independent Firms
Narrow product suite
Restricted access to capital
Limited international coverage
Limited scale
Bulge Bracket Banks
League table focusPredominantly focused on large cap
corporates and financial sponsors
Full product suite
Leveraging Macquaries corestrengths
Leading Asia-Pacific presence
Strong sector focus, deep relationships
Global platform strength and scale
Strong balance sheetEntrepreneurial approach, capital partnering
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Macquarie opportunity
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Bringing specialist expertise and a differentiated
approach to target markets
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Target Markets
Corporate Advisory
Combining focused client coverage withflexibility to respond to opportunities
Leveraging experience in six keysectors
Leasing and Lending
Primary loan origination leveraging ourhold capabilities
Customised bilateral/club lending andfull service asset finance
Commercial mortgage financing
Institutional and Retail Cash Equities
Equities underwriting and distribution capabilities
Strong mid-market coverage, but not at expense
of large cap
Comprehensive institutional distribution platform
Canadian retail distribution platform
Commodities
Deep sector expertise in energy, metals &mining and agriculture
Significant and growing physical presence
Ability to deploy balance sheet across thecapital structure
Agricultural OTC products in North and LatinAmerica
Funds Management
Global specialised asset management expertise,consistent with Macquaries core strengths
Deep institutional relationships
Debt Capital Markets and Fixed Income
Senior secured and unsecured debt underwritingand distribution capabilities
Full service fixed income sales and trading withfocus on non-investment grade and distressedcredit and Commercial Mortgage-BackedSecurities
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Growing in the Americas
Funds management
Funds management presence established in New York, Los Angeles and Toronto
Hedge fund incubation commenced through establishment of JV with MDSass1
Substantially broadened US based capability withacquisition of Delaware Investments
Canadian listed closed end funds launched
Pre-2007 2007 2008 2009 2010 2011
First peso-denominated Mexican infrastructure fund launched
Infrastructure funds business launched in Canada followed by the US
1. MDSass is a New York-based investment management firm. 2. Within the Americas. 6
AUM of $A159b (30 Sep 10), up 248% on pcp2
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Growing in the Americas
Institutional and retail cash equities1
Asian equities sales to US institutions
Canadian equities and ECM platform established (Orion Securities)
Head of US Equities appointed
Specialist energy equities capabilities acquired(Tristone Capital)
Specialist FIG equities capabilities acquired (FPK)
US ECM team established
US PCM team established
Pre-2007 2007 2008 2009 2010 2011
Global Head of Derivatives appointed(New York)
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Canadian retail distribution added(Blackmont Capital)
1. Including 50% of Americas ECM revenue. 2. Within the Americas.
Institutional and retail cash equities 1H11 income up 90% on pcp2
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Growing in the Americas
Lending, leasing and fixed income1
Emerging markets distribution
Customised commodity lending
High yield and distressed credit trading capability established
US DCM team established
Sizeable expansion of corporate lending capability
Pre-2007 2007 2008 2009 2010 2011
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High yield and distressed credit sales and research capabilityestablished
Leasing and asset financing for rail and manufacturing assets
Acquisition of leading independent technology leasing business
Expansion of vendor and channel financecapability
Macquarie Air Finance established
Real estate lending and CMBScapabilities established
Significant aircraft portfolio purchased fromAIGs ILFC
Canadian DCM team established
Lending, leasing and fixed income
1H11 income up 24% on pcp2
1. Including 50% of Americas DCM revenue. 2. Within the Americas.
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Growing in the Americas
M&A and advisory
Generalist capabilities, concentrated in infrastructure, with a principal and fund advisory focus
Pre-2007 2007 2008 2009 2010 2011
Specialist restructuring capability acquired (Giuliani Capital Advisors)
Specialist Canadian resources capability acquired (Orion Securities)
Vice Chairman/Head of Corporate Finance hired
Hiring of senior client facing Corporate Finance executives commences
Specialist energy/A&D capability acquired (Tristone Capital)
Specialist financial institutions capability acquired (FPK)
Head of Industrials hired
Specialist Real Estate PCMacquired (Presidio Partners)
Chairman, Oil & Gashired
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M&A and advisory 1H11 income up 89% on pcp1
1. Within the Americas.
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Growing in the Americas
Commodities, resources and foreign exchange
Agricultural derivatives and structured finance; energy markets and derivatives
Pre-2007 2007 2008 2009 2010 2011
Physical power business
LatinAmericanphysical oilmarkets
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Physical and financial coal transactions
Acquisition of Constellation gas trading operation and Integrys EnergyServices wholesale electric marketing and trading portfolio
Pulp and paper trading
Macquarie/Freeport LNG export project
Physical oil and NGLs trading
Commodity investor products business; emerging markets distribution and origination platform
Acquisition of Cook Inlet (natural gas); establishment of ethanol trading
Commodities, resources and foreign
exchange 1H11 income up 55% on pcp1
1. Within the Americas.
Customised commodity lending
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Deep and comprehensive industry expertise,
aligned group-wide
Sector Real EstateInfrastructure,
Utilities &Renewables
IndustrialsFinancial
InstitutionsTMET
Resources(Energy &
Mining)
No. of publishinganalysts
3 6 7 17 8 17
No. of ECM deals1 33 21 5 21 2 107
No. of DCM deals1 1 2 14 4 5 4
% of lendingcommitments2,3
2% 8% 35% 7% 14% 33%4
CY10 attributable
deal value ($Am) 317 8,268 3,800 4,200 1,927 7,680
Group wideacquisitions
Presidio FPKOrion,
Tristone,Constellation
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Delaware, Blackmont
All data current as at 31 Jan 11 unless otherwise noted. 1.CY10. 2. As at 31 Dec 10. 3. Includes supply financing, pre-pay deals and commodity repurchase transactions. 4. Includes energy financing portfolio andstructured commodity financing portfolio as it relates to energy.
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Selected transactions by sector
Corporate Advisory CY10
Infrastructure,Utilities &
Renewables Real Estate Industrials Financial Institutions TMETResources
(Energy & Mining)
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First Commonwealth
Follow-on Offering
$US86 million
Joint Bookrunner
Cooper Gay
Merger withSwett & CrawfordUndisclosed
Lead Financial Advisor
TD Bank
Follow-on Offering
$US239 million
Co-Manager
InterOil
Common Stock/Convertible Debt
$US210 million/$US70 millionJoint Bookrunner
Joint Lead Manager
Puda Coal
Follow-on Offering
$US108 million
Joint Lead ManagerJoint Bookrunner
Semafo
Prospectus Offering ofCommon Shares
$C120 million
Co-Lead Manager
General GrowthProperties
Follow-on Offering
$US2.3 billion
Senior Co-Manager
General GrowthProperties
RevolvingCredit Facility
$US300 million
Joint Bookrunner
DuPont FabrosTechnology
Follow-on Equity Offering
$US317 million
Joint Bookrunner
Teranet Inc.
Acquisition of RenewedLicenses
$C1 billion
Exclusive Financial Advisor
Midwest Gaming
Senior Secured Facility
$US120 million
Joint Lead Arranger
Airvana
Senior SecuredCredit Facility
$US360 millionJoint Lead Arranger
Joint BookrunnerCo-Syndication Agent
Centerplate
Senior SecuredCredit Facility
$US309 millionJoint Lead Arranger
Joint BookrunnerSyndication Agent
GENCO
Acquisition of ATC
$US513 million
Lead Financial Advisor
Bucyrus International
Senior Debt Facility
$US0.4 billion
Joint Bookrunner
Denver FastracksEagle P3 Commuter-rail
Project
$US2.1 billionFinancial Advisor
Sponsor andEquity Underwriter
SouthWest Water Co.
JPMorgan-led ConsortiumAcquisition
$US443 million
Exclusive Financial Advisor
Granite State Electric &Energy North Natural Gas
Acquisition by AlgonquinPower & Utilities
$US285 million
Exclusive Financial Advisor
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Evidence of progress in the Americas
513US stocksunder coverage
222 Canadianstocks
under coverage
Structuredcommodity financingportfolio of
$US919m31 Dec 10
$A159bin assets undermanagement2
$C10bin assets underadministration
31 Dec 10
More than
$US3bin corporate lending
commitments inNorth America 18
months to 31 Dec 10
#4North American
physical gasmarketer1
13 bookrun
DCM deals and38 bookrun
ECM deals in the USand Canada in CY10
53 M&A dealsin the Americas CY10,
8 involving publiclytraded targets
~$US39bcapital raised for
clients in theAmericas CY10
$US24b inAUM uplift
in DelawareInvestments during
CY10
One of the
largestindependent
lessorsof technology inNorth America
30investment advisors
added in CY10
#8ranked Canadian
equity dealer3
#11ranked US equities
research 20104
13All values as at 31 Dec 10 unless otherwise noted. 1. PlattsGasDaily Dec 10. 2. As at 30 Sep 10. 3. Bloomberg Underwriter Rankings, Canada, Canadian Equity Offerings 2010. 4. Greenwich Institutional Survey2010.
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Oil & gas and energy servicesexpertise
Specialist Acquisition & Divestiturecapability through Macquarie Tristone
Full service capital markets platform
Public and private equity capital Debt capital (including subordinated
and convertible debt) Structured and project finance Royalty purchases and volumetric
production payments
FinancingM&A and advisory
Group-wide:
Integrated team established to promotecoordinated approach to energy sector
Group-wide
Trading Physical assets and funds management
Landfill gas-to-energy facilities Gas production and distribution
business Cogeneration plants, wind farms,
biomass facilities and solar park Bulk liquid storage and handling
terminal Renewable energy infrastructure
investment capability Listed and unlisted funds with energy
investment
Financial and physical gas, electricity,oil and ethanol (via JV) trading
Corporate bonds, bank loans,securitised debt, credit default swaps
Interest rate derivative structuring andtrading Inflation-linked derivative structuring
and trading Equities trading covering oil & gas,
utilities, metals & mining, renewableenergy
MSG: Equities research covering oil
& gas, utilities, metals &mining, renewable energy
New York-based Global OilEconomist
Internal credit research
Equities research
Energy/Resources
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Energy/Resources Case Study
Building complementary group-wide capabilities
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Key challenges
Branding and positioningMacquarie brand and capabilities less well-known in the Americas
Integrated approachEvolving from single-product focus to delivering a full range of products andservices to clients across sectors in an integrated way
Adaptation vs differentiation
Combining the best aspects of US bulge bracket model while retainingMacquaries unique strengths, including appetite for principal transactions,entrepreneurial culture and speed to market
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Conclusion
The US is the biggest financial services market in the world - significantopportunity
Unique positioning to capitalise on core strengths and the market opportunity
Key hires and strategic acquisitions gaining momentum
Continuing to build brand profile and ensure delivery of unified business
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A substantial and diversified business in the Americas, withcomprehensive coverage in target sectors
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Macquarie Group LimitedOperational Briefing8 February 2011 Presentation to Investors and Analysts