Chief executive Shemara Wikramanayake said the group had renewable energy assets ready for sale, but dealmaking conditions remain tough.
Macquarie’s chief executive Shemara Wikramanayake said the lean environment for asset sales, particularly in green investments, is behind the investment bank’s 38.7 per cent slump in first-half net profit.
“Last year we had some material realisations because were more conducive. In the first half we are holding the bulk of those assets… It is important that we have this seed portfolio,” Ms Wikramanayake told analysts and investors at its half-year results on Friday. Macquarie Asset Management’s net income from investments slumped to $49 million in the six months to September 30, from $877 million a year earlier. The dip mirrored the broader halt in dealmaking worldwide, which has hit private investment firms and investment banks. As interest rates and bond yields rise, asset managers are taking longer to determine valuations and ink deals.
While total assets increased 2 per cent to $892 billion, Macquarie Asset Management’s efforts to buy more renewable power assets weighed heavily on group costs and overall profits in the first half. “The miss on revenue in MAM , as well as the softer outlook revenue expectations for MAM… speaks to a softer environment for asset and deal flow broadly,” Citi analysts wrote in a note on Friday.Banking and financial services, Macquarie’s other annuity-style business, was the brightest spot for the group as its net profit climbed 10 per cent to $638 million.
Macquarie’s markets-facing businesses were also at the mercy of weaker valuations that left deal makers reluctant to transact.last year thanks to see-sawing commodity prices after Russia invaded Ukraine – saw its net profit slide 31 per cent year-on-year to $1.38 billion. Macquarie Capital, the group’s investment bank, logged $430 million in profit, a 28 per cent dip on last year.
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