The investment bank’s chairman Glenn Stevens has warned that fossil fuels, especially gas, will be required “for quite some time to come”.
A plunge in Macquarie’s annual profit has cast fresh doubt in investors’ minds about the financial giant’s ability to make big returns from buying and selling businesses exposed to the energy transition as deals dry up.
Under chief executive Shemara Wikramanayake, Macquarie has invested billions of dollars in green energy projects spread across Europe, North America, Asia and Australia. It has become a global leader with stakes in offshore wind farms, including theMs Wikramanayake said Macquarie would only be a seller “when it is the best time to get the best returns”, which was not possible in the year to March 31.
Fossil fuel companies are treading a narrow path as their decarbonisation objectives yield inferior returns to oil and gas, frustrating boards. Ms Wikramanayake has frequently appeared at the annual COP sustainability summit, and told COP28 in Dubai last year “the transition journey is a meandering one, not just for those in finance but in the real economy”.The Macquarie boss was confident her strategy of waiting for better dealmaking conditions would pay off.
“Absent some major change, the expectation from us and all the US investment banks and private equity houses that have been reporting is that deal activity is going to start picking up,” Ms Wikramanayake said.
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