Macquarie to sell North America, Europe Asset Management operations to Japan’s Nomura in $2.8bn deal
The $68.54bn banking giant will offload its North American and European investment businesses, which consists of almost 700 staff, to Japan’s Nomura.
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Australian financial giant Macquarie will offload its entire North American and European investment unit to Japanese banking heavyweight Nomura in a $2.8bn deal welcomed by analysts.
The move involves Macquarie shedding almost 700 staff as it divests the public asset management business that generates more than $US700m ($1.09bn) in management fees.
Analysts speculate its sale will result in Macquarie booking $100m less in profits each year.
However, Macquarie Asset Management’s operations in Australia will be retained by the group, with Macquarie noting it was now planning to pivot the business into a globally focused private markets and alternatives business, aimed at servicing institutional, insurance, and wealth markets.
The all-cash transaction is expected to close by December, subject to regulatory approvals, with Nomura to snap up Macquarie’s Philadelphia-headquartered team which manages circa $285bn in assets.
As part of the deal, Nomura and Macquarie said they would “collaborate on product and distribution opportunities”, with the Japanese investment heavyweight to become Macquarie Asset Management’s wealth distribution partner in the US.
Nomura already acts as Macquarie’s distribution partner in Japan.
The latest deal will mean Macquarie Asset Management retains continued access to its US wealth clients.
Nomura will also contribute at least $300m in seed capital for a range of Macquarie Asset Management alternative investment funds tailored to American investors.
Macquarie Asset Management head Ben Way said he was “proud of the public investments business we have built and grown over many decades”.
“We are pleased that Nomura will carry it forward into a new phase of growth in North America and Europe,” Mr Way said.
“We are also excited to further strengthen our collaboration with Nomura, creating benefits for our respective clients.”
Mr Way, who steers the manager of nearly $945bn in assets, said the deal with Nomura “will allow (Macquarie Asset Management) to build on our leading global position in private markets, and our leading position in Australian public markets, as we focus on providing solutions for our institutional, insurance and wealth clients.”
Macquarie green-lit the deal after the bank’s board met in Sydney on Tuesday morning, amid a heavy week for the board. Negotiations between the two sides had been under way for several months, with Macquarie handling the sale in-house, with Morgan Stanley advising the bank on the American side of the deal.
MST Marquee analyst Brian Johnson noted Macquarie’s move was “an unambiguous positive” for the bank, noting it would shed a low growth, low return on equity, “management-distracting business”, which obscured the strengths of Macquarie’s private markets operations.
Mr Johnson said he expected the deal would lead to Macquarie banking a $300m gain in the 2026 financial year, release $1bn in capital, but also shed $100m in profits in the years ahead.
UBS analyst John Storey said the sale “highlights the challenges which active managers are facing, as the industry continues to consolidate”.
“We think this transaction makes sense, given the business has operationally struggled but is disappointing given the time and resources committed to building out this business,” Mr Storey said.
Nomura said it had identified global asset management as a “key strategic growth priority”, noting the deal with Macquarie would “expand the global capabilities and client footprint of its investment management division”.
The deal is expected to boost Nomura’s assets under management to more than $US770m, in Nomura’s biggest deal since purchasing Lehman Brothers from the ruins of the 2008 Global Financial Crisis.
The Japanese group noted the deal also provided it “with a scaled hub” pointing to Macquarie’s “high-operating margin business”.
Staff at Macquarie’s North American operations were told about the move on Tuesday, with a town-hall meeting to discuss the deal set for later that day.
Macquarie Asset Management’s North American operations will retain Shawn Lytle as its local head, alongside several other members of the management team who will remain with the business.
Nomura said it would carry out several initiatives in the wake of its acquisition, noting the need to develop new investment capabilities and scaling its active ETF platform launched in mid-2023.
Nomura president and chief executive Kentaro Okuda said the Macquarie acquisition “will align with our 2030 global growth and diversification ambitions”.
Its investment management division chair Chris Wilcox said the transaction “will be a significant step in building a truly global franchise with a comprehensive set of solutions to serve investors worldwide”.
Shares in Macquarie traded higher on the news, closing the day up $1.01, or 0.56 per cent to $180.83. Macquarie will report its full year earnings on May 9, with expectations the group will deliver a $3.7bn profit.
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Originally published as Macquarie to sell North America, Europe Asset Management operations to Japan’s Nomura in $2.8bn deal
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