Macquarie Groups

take Infrastructure or TMET. Inf is the most prestigious but the guys from TMET are great

Before I go into the overviews of the groups, keep in mind that as I have said in my prior posts, this group preference is just a guidepost for them to keep in mind. Staffing is done much more on an as needed basis. So, while you may pref infrastructure or TMET you could end up in Debt if thats where the deals are and where they need people. Now onto the descriptions:

Infrastructure and Utilities: Really two separate groups
-Infrastructure: Mainly toll roads and airports, in fact there is a toll roads subgroup. This is the mainstay of the firm in the US and globally, you will have dealflow on big, prestigious deals, and you will work. Only problems with this group are that the level of hours you put in approaches normal banking and basically all toll roads are alike so there's not a ton of deal diversity
-Utilities: Decent group, be prepared to work on the same deal for 2 years. Remember there is a lot of red tape and bureaucracy in the utilities space. Did you read about how Macquarie bought Puget Sound Energy, well a deal like that took 6 months to get to that point and probably has another year or two till its finished. That being said, its a fairly interesting space

Oil & Gas: Interesting space, Macquarie isn't always the most competitive bidder in the space. Smaller group, so I don't have that much commentary on them.

TMET (Telecommunications, Media, Entertainment and Technology): I actually know very little about this group, their deals overlap with Property, and its not our forte.

Property: One of the newest and most profitable groups in NA. As the name suggests, they work on deals back by property, REITs, housing, etc. The group also does, parking, FBOs (look it up), Wireless towers, distressed CMBS, and anything else they can find. Extremely opportunistic and lean group, good hours and good people.

Industrials: Largest group in North America, has a good deal flow and is the most like normal PE in the types of acquisitions that they target. If you're a fan of MM PE its a pretty good group. As the largest group, there are a lot of people between you and your goal of standing out and getting a share of fees and promote.

Restructuring: Post the acquisition of Guiliani Capital, Macquarie actually has a pretty decent restructuring group. If you are interested in it, couldn't hurt to do some work in the space. Fairly long hours as the group head is very motivated and stays very late (MD stays till 10 or 11 on a regular basis)

Equity Capital Markets: Growing group, no deals, new initiative for Americas (why would you join Macquarie to go to ECM)

Debt: See ECM

Great post PowerMonkey, any chance you know someone that can do that for MS in London? ha

PowerMonkey, thanks a TON for the extensive reply. That helps a lot!

If you are interested in keeping the door open to corporate (rather than infrastructure or real estate) PE afterwards, which group is best? Or, are you better off choosing the groups in which Macquarie is strongest?

also wondering about jeffrey's question. my inkling is that you should still go with what the firm is best at to get the most exposure, but let's see what power monkey has to say.

At first I was tempted to tell you guys, go for the strongest group, ie Infrastructure, but as I thought about it, here are my reactions.

First off, Macquarie is a place to build a career. Whenever people ask about the exit opps, I feel this is very important to note. Macquarie likes to promote internally and does it very quickly. Its two years analyst then automatic promote to associate (or you get fired but it very rarely happens), then its 1-2 years associate, 1-2 years senior associate, and on up. Macquarie has been know, for good performers, to promote every year, meaning there are people who go from analyst to MD in 5-6 years. At all levels, there is profit sharing on deals (yes it scales with your level). Macquarie has a program where in 2 years you get a Masters of finance in IB (from INSEAD), while working, by taking off 3 weeks at a time earning your salary and they'll pay for it. You get above street salary and bonus, while you should always keep in mind potential exit opps, think of Macquarie as a place to go for more than a 2 year stint.

That all being said:

-Everything Macquarie does is infrastructure, or infra-like broadly speaking. When Mac does TMET, it does wireless towers, locals gaming, slot machines. For Property, it looks to high barrier to entry, long term, stable cash flows, low volatility etc.
-Every group does deals, its up to you to stick up your and and get your name associated with them. Anyone at Macquarie for a few years will do an LBO, probably have some experience on a PPP type deal (parking, toll roads, airports, bridges, tunnels, whatever).
-Infrastructure is the largest group at Macquarie in NY, the deals that it works on are GIGANTIC, 15-20 people deal teams in a room for a year type deal teams. This is a pro and a con, you work on high profile deals, but don't do many of them.
-TMET and Property are much smaller, so you get a lot more one on one with senior level personnel and more responsibility. Smaller deals on the whole, but you get more of them on your resume.
-Like coming out of any firm, it is all in what deals you work on, what kind of exit opps you have. So, if you do one toll road PPP deal while at MacCap and nothing else, you will just be able to goto an infra firm. If you do a REIT take private, you have a slightly broader pool of options.
-Broadly speaking TMET and Industrials are the most normal PE like.

If you are gonna focus on exit opps, your exit opps will depend on the deals you work on. So, if you want to go straight up PE do TMET, Industrials, or Property. If you want to exit to an Infra fund, well I shouldn't need to answer that.

Macquarie is not, let me repeat, not on the normal circuit, it is not a 2 year, go to some PE shop, goto B-school, go back to PE kind of place. If that is what you want, you should go to a BB or MM bank. If you think you want to do something PE like long term with good pay and good internal options with a potential exit if necessary, go Macquarie.

This is a bit off-topic but I've heard that everybody at MacCap is required to pass the Series 7 and 63 which doesn't make too much sense to me. Why would you need those in ibanking? I dont know much about them, but I thought they were S&T type certifications. Can you comment on that?

At most banks, they only require associates and above or trading related personnel to take the tests. Macquarie has everyone do it for a number of reasons.

-Allows analysts to be in a client facing role
-Limits liability
-Costs very little
-Not a "two and out program" so you'll have to take it anyway
-Macquarie will put anyone in front of investors and you can't talk to them without the licenses

This is the first time ever Macquarie has asked incoming analysts for group preferences. So whereas in past years ppl were more generalists, this was more a result of a lack of resources rather than the norm. All other major offices operated strictly within industry groups and this will be the case for newcomers going forward. The only guys that will really remain generalists are those associates and vps with a history of working with directors across different groups. With 70+ analysts, no need for directors to poach new, unknown ppl from other groups to work on their deals. SO, CHOOSE YOUR GROUP WISELY.

In order to gauge the marketability of your analyst years at Macquarie (despite PowerMonkey's valid points on Macquarie being more than a 2 and done program, let's face it, no one is ever wedded to a specific company, especially in banking, and its nice to know you can always go elsewhere) you must follow the money - as in, which groups have money to do deals. Doing deals, at the end of the day, gets you paid, gets you experience and opens doors for better opportunities.

Infrastructure: Not much really to say other than 90% of Macquarie's funds are earmarked for infrastructure. Specifically, Macquarie's 2 flag ship funds are a toll road fund and a airport fund. Lots of general infra funds as well.

Oil and Gas: No money, not much of a team.

TMET: 2 dedicated funds (1 in media and 1 in communications infrastructure). Decent, but not great. It is NOT comparable to a TMT group at most investment banks. It is infrastructure TMT meaning there is nothing resembling anything close to Silicon Valley related companies. Have not done any significant deals. The one deal of note, a tower deal was done by guys that aren't even in this group.

Property: "One of the newest and most profitable groups in NA"??? Agree with PowerMonkey that it is the newest but far from the most profitable. If he is basing that on 1 single deal that they've been able to do than I'd question his knowledge of Macquarie. No dedicated fund and competes internally with the Real Estate Group (which is not part of MacCap (aka. the investment bank of Macquarie). Look mostly at nursing homes and the like if that's your thing.

Industrials: Had some momentum and have made a lot of money in recent years (due to a handful being absolute homeruns). But many PE firms have had bigger homeruns in recent years competing in the same space because of the easy money out there. With no dedicated fund and huge team (basically all the non-restructuring Giuliani guys ended up in this group) prospects aren't fantastic for a junior guy in this group. You could end up working on small, crappy third-party advisory deals. (And I mean REALLY small)

Restructuring, ECM and Debt: Agree with PowerMonkey on these. Why would you come to Macquarie to work in any of these groups?!?

Best exit opps are in the infrastructure group. Everyone and their mother has raised infra funds recently and who do you think they want to fill their ranks with? Macquarie guys with infra experience are at a premium. On the flip side, though being in infra group provides the most exit opps, you'll question why you'd leave the #1 infra group (unless for $$$).

If I'm a incoming analyst my choices are:

1. Infra
2. TMET (at least they have 2 dedicated funds to source equity)
3. Industrials (because there is a chance, though it may be small, of working on a homerun deal)

Thanks for the great advice, blah and powermonkey.

I'm in the process of choosing groups as well right now and put infra as my top choice. What do you guys think of the Mac Cap Funds groups? It's not what I signed up for but it was included in the list of teams that we could potentially get put in...

thanks everybody for great advice. much appreciated.

thanks very much power monkey and blah

another question though:

power monkey, you say that macquarie is not a traditional 2 year analyst program, which is true. but what would stop individual analysts from still treating it like one and looking for exit opps after a couple years? is it that the mega-funds or even middle market PE players wouldn't respect the maccap experience? not equivalent skills to BB analysts? something else?

basically my overall question is how can you best position yourself for traditional corporate PE while at macquarie? can you keep that door open to you or will you almost definitely be pigeon-holed long term if you work in infra?

bump

Exist ops coming out of Mac will be comparable to most shop. Top ranked analysts from Mac are headhunted for opportunities at PE and hedge funds.

Your experience will be different to working at a major BB but I would argue that it prepares you better for PE and hedge fund interviews. Why? Because you would have done for 2 years what you will be doing at the PE/hedge funds: that is, analyzing investments, modelling potential acquisitions, doing due diligence, working to secure financing, creating business plans, looking at investment exit options, etc.

That being said, there isn't a history of Macquarie guys going to the KKRs, Blackstones and TPGs of the world but that's more a result of the few truly Macquarie junior guys available that major funds would find to be attractive candidates. (I would say there are only about 6-8 out of the 100 or so that fall under this category. The rest haven't been around long enough to have built up the skillset within Macquarie. These 6-8 guys have no shortage of other shops they can jump to in a heartbeat if they wanted to).

As for how to best position yourself? Its no different than at any other shop. Become recognized as a top ranked analyst and the opportunities will find you. Macquarie partners up with or competes on auctions against top funds in the PE and hedge fund world all the time. So you don't have to worry about exposure to the traditional PE world.