Australia’s Macquarie loses most in 2 weeks on tepid asset management outlook

(Reuters) – Shares in Macquarie Group slipped more than 2% on Wednesday after the Australian investment bank flagged that its asset management division will face continued economic headwinds through the first half of 2024.

The company said its private markets’ assets under management (AUM) of A$326.8 billion ($207.84 billion), as of June 30, was down 3% compared with end-March figures. Macquarie attributed the drop to the expiry of co-investors’ management rights on a specific asset.

Net other operating income for its asset management arm is substantially down in the first half due to lower investment-related income from green energy financing, Macquarie said, adding that asset realizations are now predominantly expected in the second half.

Shares of Macquarie posted their worst intraday session since Aug. 17, versus a 0.3% decrease in the benchmark S&P/ASX 200 index.

The company had earlier flagged a “substantial” fall in the April-June profit, as weaker trading conditions hurt its crucial commodities business, without disclosing a profit figure in its quarterly update.

Based on fiscal 2023 net profit contribution from operating groups, Macquarie’s asset management unit contributed about 23% to the company’s earnings in fiscal 2023.

As of March 31, Macquarie asset management division had AUM, which includes equity yet to deploy, of A$870.8 billion, compared with A$773.1 billion in the year-ago period.

($1 = 1.5723 Australian dollars)

(Reporting by Roushni Nair in Bengaluru; Editing by Sherry Jacob-Phillips)