Skip to content

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved.

Macquarie Group share price: is AUM of $1 trillion the aim?

According to analysts from Morgan Stanley: ‘We think >A$1tn AUM should be MQG's target.’

Macquarie Group share price: is AUM of $1 trillion the aim? Source: Bloomberg

The GEFI deal

Macquarie Group (ASX: MGQ) yesterday announced that it would be buying AMP Capital’s global equities and fixed income business (GEFI), for a total consideration of up to $185 million.

The GEFI business has operations spanning fixed income, Australian listed equities, listed real estate and listed infrastructure.

Both AMP and Macquarie’s stock didn’t move much after the deal was announced: the market was seemingly indifferent, with Citi describing the acquisition as immaterial, in terms of earnings benefits.

The deal – which is made up of a $110 million upfront cash consideration and up to $75 million in earnouts – will see Macquarie’s assets under management (AUM) reach $720 billion.

Commenting on the implications of the acquisition, Head of Macquarie's Asset Management, Ben Way said:

'This transaction represents another opportunity, following our recent acquisition of Waddell & Reed, to add scale and expand our public investment capabilities.’

'It cements Macquarie's position as the leading investment manager in Australia by AuM, and provides new clients joining us from AMP Capital with access to Macquarie's diversified investment offering and global platform.'

Do you have a view on Macquarie? Whatever you think, you can use CFDs to trade stocks and other assets, through IG’s world-class trading platform.

For example, to buy (long) or sell (short) the ASX-listed stocks we have discussed today using CFDs, follow these easy steps:

  • Create an IG Trading Account or log in to your existing account
  • Enter <Company name> in the search bar and select it
  • Choose your position size
  • Click on ‘buy’ or ‘sell’ in the deal ticket
  • Confirm the trade

For investors not looking to trade stocks, you can invest in shares directly through our share trading service.

Is AUM of $1 trillion the aim?

Below we look at some key comments on the deal from leading Australian brokers.

According to analysts from Citi:

‘Macquarie's acquisition of AMP Capital's global equities and fixed income business (GEFI), signals their clear intent to build global scale in public markets.’

Despite that, Citi has a Sell rating and $140.00 price target on Macquarie, noting that the stock’s ‘valuation and earnings expectations appear stretched near-term, with rising risks around interest and tax rates.’

By comparison to Citi, analysts from Morgan Stanley have an overall more optimistic view on Macquarie, assigning the stock an Overweight rating and $175.00 price target.

Morgan Stanley also agreed that the deal appears aligned with Macquarie's broader strategy of focusing on ‘bolt-on deals to add scale,’ while adding that ‘We think >A$1tn AUM should be MQG's target.’

The investment bank further noted that the deal price of up to $185 million looks reasonable on valuation grounds and when stacked against comparable businesses.

An acquisitive streak

The AMP deal builds on Macquarie’s recent history of bolt on acquisitions, with the group recently finalising the acquisition of Waddell & Reed Financial for a total consideration of US$1.7 billion.

At the time of that acquisition management noted that Macquarie Asset Management would become one of the 'top 20 actively managed, long-term open-end US mutual fund manager by assets under management.’

The Macquarie Group share price was down 2.67% at the time of writing to $152.95 per share. The ASX 200 benchmark was also lower.

This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.