Barrenjoey plans merger with Magellan Financial Group

Barrenjoey Capital Partners (Barrenjoey) intends to merge with ASX-listed Magellan Financial Group (MFG) to form a diversified financial services company, which would have a combined AUD 2 billion ($1.4 billion) balance sheet.

The combined company would operate across public and private markets, providing corporate finance, fixed income, equities, research and investment management support to clients.
Post completion, Barrenjoey CEO Brian Benari will become the new group CEO, and Barrenjoey chairman David Gonski AC will become the new group chairman.

Guy Fowler and Matthew Grounds will continue as co-executive chairs of Barrenjoey Capital Partners; Sophia Rahmani will continue as the chief executive of Magellan Investment Partners, and Andrew Formica will become deputy chairman. Barrenjoey’s independent directors will join the board of MFG post-completion.

The combined group will have a AUD 2 billion ($1.4 billion) balance sheet, significant free cash flow and a more diversified client offering.

Gonski said, “This is a proud moment for Barrenjoey. Five years ago, a group of talented professionals came together with a vision to build an independent, Australian-headquartered financial services firm that could compete at the highest levels. From this start, Barrenjoey’s team has fulfilled their shared vision of servicing clients at a very high standard and being a great place to work."

"MFG has been part of our journey from the beginning of Barrenjoey as a founding investor. Joining forces provides an ideal platform for our next phase of growth together as a top tier financial services group, while ensuring our clients and our people remain at the centre of everything we do. I have been very honoured to have been the chair of Barrenjoey over the last few years and am extremely excited and pleased to be the proposed chair of the combined group going forward,” he added.

MFG chairman Andrew Formica said, “The merger with Barrenjoey marks a transformative step in MFG’s evolution, bringing together two highly complementary businesses to create an Australian financial services group with meaningful scale and breadth.”

Barclays Group chief executive C.S. Venkatakrishnan said, “This development is an endorsement of Barrenjoey’s long-term trajectory. We recently celebrated the five-year anniversary of the strategic partnership between Barclays and Barrenjoey and are excited by the opportunities that this next step presents.”

Our priority is to continue to serve clients in Australia with excellence by leveraging Barclays’ global capabilities and Barrenjoey’s local expertise.”

Barrenjoey CEO Brian Benari said, “The merger will benefit our clients, through deepening our global distribution, expanding our balance sheet and diversifying our product offering.”

"We are particularly excited about the opportunities for our Private Capital arm who will bring together our expertise in private assets with MFG’s global distribution capability and infrastructure,” Benari added.

Barrenjoey co-executive chairmen Guy Fowler and Matthew Grounds said, “Barrenjoey only exists because of the early support from our clients and the vision and commitment of our founding employees and their families. We also acknowledge the support from our founding shareholders Barclays and MFG, including Hamish Douglass’ early support and vision. We are very excited about this next step and the opportunities that it provides for our clients and our staff.”

On completion, Barclays’ shareholding will be limited to approximately 4.9% of the share capital of MFG to simplify the impact of US regulatory requirements on the merged companies. Barclays chairman of investment banking Paul Compton intends to join the MFG board post-merger. Barrenjoey’s strategic alliance with Forsyth Barr will continue to deliver reciprocal access to institutional equities research and execution, corporate advisory and capital markets services in Australia and New Zealand.

Barrenjoey will continue to be focused on contributing to the community, both directly and through partners like Adara Group, NASCA and Community Capital. Since its capitalisation, Barrenjoey has committed over AUD $13 million ($9.1 million) in donations and grants.

Re-disseminated by Wealth and Society