Macquarie revises outlook as asset sales push out to second half

afr.com:

Macquarie Group’s asset management arm downgraded its short-term outlook as it expects returns from potential asset sales to push out into the second half of the investment bank’s 2024 financial year.

The asset management division – with about $864 billion under management – still expects base fees to be largely in line with last year, but a dip in valuations globally has made it challenging for companies to sell assets, while tougher-talking regulators have made it increasingly difficult to estimate when, or if, deals will close.

Macquarie shares fell 1 per cent to $175.11.

CEO Shemara Wikramanayake with Alex Harvey in 2022. Elke Meitzel

One considerable transaction for the asset management arm is the expected $1.5 billion Macquarie could pocket from the sale of North American terminal operator Ceres.

The division agreed to sell the business to transportation company Carrix in June, roughly four years after picking up the outstanding 51 per cent of the business from Nippon Yusen Kaisha for about $105 million.

Macquarie amended its immediate outlook ahead of chief financial officer Alex Harvey’s scheduled trips to Hong Kong and London this week. He will speak to analysts and investors at Jefferies’ Asia Forum in Hong Kong today, and will address an audience at Goldman Sachs’ annual Australia-New Zealand Investment Forum in London on Thursday and Friday.

Asset management raised $2.1 billion in new equity in the first quarter for the 2024 financial year from private markets; the division invested about $4.8 billion and divested $700 million.

The division earned approximately $5 billion in net operating income for the 2023 financial year that ended in March. This also included about $2.8 billion in base fees for the period.