In an era when the big four banks have suffered in the press and the sharemarket, the ‘fifth’ bank has stood out – Macquarie Bank. At an investor gathering in Sydney last week, Peter Warne, Macquarie’s chair, gave some clues as to how adherence to fundamental values stands the organisation in good stead in troubled times.
Macquarie, which is actually Australia’s largest fund manager due to its global expansion, has had a long-established mantra of what it stands for, summarised as: ‘Opportunity, Accountability’ and ‘Integrity’. ‘Opportunity’ probably attracts most of the investing public interest.
Warne was speaking at a lunch in Sydney organised by the Uniting Church’s funds management arm, the $1.6 billion Uniting Financial Services (UFS). The lunch was part of a regular program where UFS invites influential people to discuss broad issues with the industry. Last week’s event coincided with the first subordinated debt security to be issued by UFS for a ‘sustainable bond’. The manager is looking to raise up to $50 million with the issue. Its ESG credentials go back a long way.
Warren Bird, UFS executive director, said: “We’re in the stage now of receiving feedback from investors. So far, it’s very encouraging. It’s unlike anything else in the market or what we’ve done before.”
He said that, when the Uniting Church was set up, in 1980, it decided upon 14 key principles for its investments. “We have lived and breathed [ESG] which other managers have more recently started to come to terms with,” he said. “We are part of the Church’s mission to change the world for the better.”
Coincidentally, Peter Warne is also the chair of the NSW Government’s $110 billion fund manager and debt issuer, TCorp. TCorp, which recently raised a record $1.8 billion for a sustainability bond. It has recruited a specialist ESG manager and is looking for another specialist manager in the space, Warne said.
Warne, who is also a director of ASX Ltd, said TCorp was now as much a fund manager as it was a debt issuer. He has been on the board since 2012 and became chair earlier this year. “I’m enjoying working with the TCorp business,” he said. “I was involved with setting up TCorp and the ‘Hourglass Fund’ [the main TCorp investment fund as it was known in the 1990s]when I worked at BT. TCorp is going through its own evolution. It used to be more standalone but is now under NSW Treasury guidance, looking to expand its role throughout the NSW public sector.”
Back to Macquarie, Warne said: “I asked Nicholas Moore [who was chief executive of Macquarie for 10 years until mid-1918]one day ‘what is Macquarie all about?’. He said: ‘It’s to attract the best people to help solve our clients’ problems’.”
Warne said Macquarie put a lot of effort into guiding the firm’s culture. Gender diversity, for instance, was something which occupied senior management’s minds. Only 28 per cent of Macquarie’s job applicants were female, he said, but more than 50 per cent of finance graduates, generally, were women.
“The board is conscious of this and is looking at ways to address it… While we put a lot of effort into developing the company’s culture, it’s difficult to measure. It’s hard to know exactly what it is, but you do get indications. We meet with staff regularly to discuss it.”
He said that diversity was also critical at the board level. “We need a good mix of people so they can look through problems and ideas through different lenses and arrive at the best outcome.” Nicholas Moore’s replacement as chief executive is a woman of ethnic origin who has been at Macquarie for many years, Shemara Wikramanayake.