Macquarie Group Limited

  • Date founded: 1969
  • Industry: Banking and finance
  • Corporate Headquarters: Sydney, Australia
  • Type: Public

Overview

Macquarie Group Limited is an international banking and finance company based in Australia. It is the parent organization of several divisions focused on various aspects of its business. These divisions include Banking and Financial Services, Commodities and Global Markets, Corporate and Asset Finance, Macquarie Asset Management, and Macquarie Capital. The company also has a philanthropic branch known as the Macquarie Group Foundation and a business segment dedicated to supporting artists known as the Macquarie Group Collection.

The group operated in over thirty countries with 20,000 employees in the 2020s, providing a wide range of services, including asset management, consumer and corporate banking, commodities and equities trading, investment banking, foreign exchange trading, leasing, money-market services, and wealth management.

History

The company that became Macquarie was established in December 1969. Originally known as Hill Samuel Australia Limited, it was founded by Ernest Stanley “Stan” Owens, an Australian businessman and local politician. The original company employed just Owens and two others.

Owens proposed the new financial institution as a subsidiary of the London-based investment house Hill Samuel & Co. That company had its roots as an importing business started in 1832 by Marcus Samuel, who sold seashells and other items imported from Asia. His business grew and Marcus later began trading in petroleum products. His son, also named Marcus Samuel, would go on to found the Shell Oil Company, named after the shells from his father’s original business. However, Samuel, the father, maintained a primary focus on investment banking.

Samuel’s investment business merged with another investment firm, Philip Hill, Higginson, Erlangers Ltd., in 1965. As a result of this move, the company’s name was changed to Hill Samuel. Owens proposed opening an Australian subsidiary and this proposal met with approval. Owens was placed in charge of the new operation, which officially opened for business in Sydney in early 1970.

The new company, called Hill Samuel David Clarke, was immediately profitable and began to grow. During the next several years, it expanded its products to include direct investments. The company also increased its presence in the international banking world with investments in other countries. The company changed its name to Hill Samuel Australia in 1982 to reflect this new focus.

As the company continued to grow, however, it increasingly found itself limited by the fact that it was a subsidiary of a British company, which restricted the services it was allowed to offer in Australia. This, combined with new reforms in Australian banking laws, led to the company deciding to become a new organization separate from its British parent company. As part of banking deregulation, the Australian government was only allowing a small number of foreign banks to open in Australia. This prompted Hill Samuel to appeal for one of these licenses as an Australian-operated financial institute in 1985. When the license was granted, the company changed its name to Macquarie Bank.

The new bank took its name from Lachlan Macquarie. Macquarie was a Scotsman who came to Australia in 1809 and became one of its early governors in 1810. He would go on to govern for twelve years, during which time he instituted a number of changes that helped Australia rise above its status as a British penal colony. One of these was establishing the first bank in the colony, which he did over the objections of British authorities. He also helped stabilize the colony’s economy by purchasing a large quantity of Spanish coins, punching a hole through them, and reissuing them as “Holey Dollars.” This innovation became a new form of currency in the area; it is also part of the current Macquarie Company’s logo and considered symbolic of their mission to establish new and innovative ways to bank.

In 1985, the company also opened its first office outside of Australia, establishing itself in New Zealand. From there, it expanded to open new offices and acquired existing businesses in Australia and elsewhere. In 1989, Macquarie opened offices in both Munich, Germany and London, England. In the 1990s, offices were established in New York and Hong Kong. Macquarie Bank International Limited opened in the United Kingdom in 2008, and, in 2013, the company acquired a license allowing it to also operate as a Hong Kong-based bank.

In the early and mid-2020s, Macquarie acquired and invested in several organizations to expand its asset management and renewable energy sectors, including Waddell & Reed Financial, Inc., AMP Capital's Global Equities and Fixed Income business, Camin Cargo, Kalkomey Enterprises, LLC., Byggfakta, Fresh Produce Group, Last Mile Infrastructure (Holdings), Far North Power Corp., Zitonoffshorewind.biz, and Therme Erding.

In 2024, Macquarie Investment Management Business Trust agreed to pay a $79.8 million settlement after the US Securities and Exchange Commission found the company overvalued assets and executed biased cross trades between January 2017 and April 2021. Later the same year, the UK's Financial Conduct Authority fined Macquarie Bank £13 million for "serious failings," allowing a trader to conduct over 400 fictitious trades over twenty months, resulting in significant losses.

Impact

Macquarie Group Limited was known in the banking and investment world as the “Millionaire’s Factory.” This is because of its history of rewarding its executives with substantial bonuses for generating substantial profits with high margins. The company lost this nickname after financial losses during the 2007-2010 Global Financial Crisis. However, it is still a strong player in the international financial market. The company is more global in its workings than many major banks, conducting more than 70 percent of its business outside its home base of Australia. It has also developed a somewhat more conservative approach to its business mix since the crisis.

The company continues to focus on innovation, not just in banking but in other aspects of its operations as well. For instance, it has gained attention for its unique approach to protecting against cyber-attacks, which involves hiring people with diverse educational backgrounds to provide a broader perspective in countering increasingly creative methods of attack. The company also takes an innovative approach to how it operates, focusing on the company as a whole and not individual contributions or accomplishments. This is reflected in everything from the formatting of its annual reports to the design of its Sydney headquarters, which features mobile work areas and meeting areas that accommodate large groups.

Bibliography

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"Macquarie Unit to Pay Nearly $80 Million to Settle SEC Charges." Reuters, 19 Sept. 2024, www.reuters.com/business/finance/macquarie-unit-pay-nearly-80-million-settle-sec-charges-2024-09-19. Accessed 20 Jan. 2025.

McLachlan, N. D. “Macquarie, Lachlan, (1762-1824).” Australian Dictionary of Biography, adb.anu.edu.au/biography/macquarie-lachlan-2419. Accessed 20 Jan. 2025.

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