Not easy being green
Macquarie isn't backing away from its expansive bet on financing the energy transition despite a big profit hit and signs that investors may be losing patience.
Macquarie Group has made an enterprise-defining bet on financing the transition to a lower carbon global economy. But after its full-year profits fell by nearly a third to $3.5 billion and its return on equity sank to its lowest level in a decade, there are signs investor patience is beginning to wear thin.
Veteran bank analyst (and former Macquarie staffer) Brian Johnson of MST Financial was scathing on the company’s conference call with analysts following the result, standing up for what he described as “long suffering shareholders” in the diversified financial services group.
Yet despite the negative market reaction (shares were down 2% in a rising broader market), Macquarie CEO Shemara Wikramanayake told Capital Brief the group’s commitment to the green transition remains intact.
Macquarie’s green strategy is complex. It relies on buying and developing assets like solar and wind farms, putting them on investment platforms, and then selling them either to its own funds or third parties. It’s a recycling strategy — capital recycling in this case.
