Some of Australia’s top finance dealmakers have been recruited to run a new full service broker and investment bank backed by ASX-listed fund manager Magellan Financial Group and British bank Barclays.
A star-studded line-up, including three ex-UBS Australia executives, will head up Barrenjoey Capital Partners. It will offer corporate advice, equity and debt capital underwriting and research and brokerage.
Barrenjoey is led by former Challenger managing director Brian Bernari, who becomes chief executive, and former UBS executive chairman Guy Fowler who takes the role of chairman. Ex-UBS investment bankers Matt Hanning and Chris Williams are founding partners as well as John Cincotta, a former Deutsche Bank executive.
Ken MacKenzie, the chairman of BHP and former chief executive of Amcor, will join in early 2021 as a senior strategy partner. Cynthia Whelan, who has held executive positions at Scentre Group and Telstra, is a senior adviser.
Magellan’s investment of 1.2 million Magellan shares (worth about $66 million) and $90 million of cash will give it a 40 per cent stake in the venture. Barclay’s investment of $45 million gives it a 9.99 per cent stake, with Barclays covering global product distribution, research and cross border advisory. The rest will be owned by the senior hires and others that will be recruited as the business reaches scale.
Hugh Dive, the chief investment officer at Atlas Funds Management, said investment banking was a “crowded” space with high fixed costs and commissions on brokerage “are not going up”. He said the Barclays backing was important as it gives Barrenjoey the balance sheet to underwrite the bigger corporate deals, as well as global distribution muscle.
“If anyone can make a go of it, it is Barrenjoey given the calibre of the people running it,” Mr Dive said.
Magellan was looking to diversify its sources of revenue and for Barclays the joint venture was a “lower-risk” way to enter the investment banking market in Australia than entering on its own, Mr Dive said.
Magellan was founded in 2006 by Hamish Douglass and Chris Mackay. As at August 31, Magellan had funds under management of just under $101 billion through a range of ASX-listed and unlisted global equity and infrastructure funds.
In 2018, Magellan bought John Sevior’s Airlie Funds Management – a specialist Australian shares manager.
Barrenjoey corporate finance will be operational next month from its Sydney office and its markets business will commence in mid-2021.
Source: Thanks smh.com