Macquarie Bank's 20-Year Journey: From Incremental Steps to Global Player

Lachlan Colquhoun ALLAN MOSS, the chief executive of Australia's Macquarie Bank, has used a Chinese proverb to describe the approach that has transformed his company from an outpost of a British investment bank to a global player inside 20 years. Under Moss's leadership, Macquarie has grown from a small Sydney operation with a 50-person headcount in 1977 to a global bank with $21.4 billion in revenues, sourced from both onshore and offshore operations. The bank's "Macquarie Model" of packaging real estate and infrastructure assets into funds has been successful around the world, emulated by other banks, and has resulted in assets worth $46 billion under Macquarie's management.

Key Takeaways:

• Macquarie Bank's revenue has grown to $21.4 billion, with approximately 40% coming from offshore operations.
• The bank's acquisition of ING's cash equities business has added 450 staff to its headcount and increased its income from Asia to about one-third of its total income.
• The bank's "Macquarie Model" of packaging real estate and infrastructure assets into funds has been used in projects such as toll roads in Korea and airports in Kenya, and has resulted in assets worth $46 billion under Macquarie's management.
• Macquarie has acquired a stockbroking licence in Malaysia, is setting up business in India, and has announced a joint venture in Thailand.
• The bank has listed a $1 billion infrastructure fund in Singapore, snapped up retail malls in China, and is planning to bid for the London Stock Exchange.
• Macquarie's chief executive, Allan Moss, has been with the bank since 1985 and has driven the bank's success with a strategy based on "adjacency" and "competency.
• Moss's leadership approach emphasizes a "small business culture within a larger organisation" and has resulted in high salaries and bonuses, with the average staff wage exceeding $185,000 per year.
• The bank's "freedom within boundaries" approach allows for decentralization of decision-making and has contributed to low staff turnover of around 6% for the top 20% of staff.

Statistics:

• Macquarie Bank's revenue has grown to $21.4 billion, with approximately 40% sourced from offshore operations.
• The bank has over 450 staff added to its headcount following the acquisition of ING's cash equities business.
• Assets under Macquarie's management total $46 billion.
• Macquarie's average staff wage exceeds $185,000 per year.
• The bank's top seven executives shared a total of $89.3 million in bonuses last year.

Sources:

• The Australian Financial Review
• Macquarie Bank's annual report
• UBS Warburg research report
• Interview with Allan Moss, chief executive of Macquarie Bank.