Australia’s newest investment bank, Barrenjoey Capital Partners, will provide services across a wide range of activities – corporate and strategic advisory, corporate finance (equity and debt capital market underwriting), equity cash sales and trading, and research.
The business will also cover derivatives and fixed income.
Barrenjoey was launched yesterday via an announcement by fund manager Magellan Financial Group that it is a foundation investor, along with Barclays. Magellan appears to have initiated the formation of the group.
Barrenjoey, which has not yet received its Australian financial services licence, will be headed by executive chair Guy Fowler, a former head of corporate finance at UBS, and chief executive Brian Bernari, a former chief executive of Challenger Ltd.
BHP chair Ken McKenzie will join next year as senior strategy partner.
Magellan has committed A$90 million of cash and 1.2 million Magellan shares (which closed at $54.99 yesterday) for a 40 per cent economic ownership interest and a 4.99 per cent voting interest.
Magellan will have no day-to-day involvement in the management of Barrenjoey.
Barclays has committed $45 million for a 9.99 per cent economic interest and a 4.99 per cent voting interest.
Under the “partnership model” control will be with the executives and staff of the firm, who will have 50.01 per cent economic ownership.
Barclays and Barrenjoey have entered into a co-operation agreement covering the distribution of global product, research, cross border advisory and debt capital markets. Barclays will also make additional regulatory capital and balance sheet capacity available.
Barclays scaled back its operations in Australia in 2016 but dipped its toe back in the water last year, when it became an ASX market participant and set up an investment banking team.
Barrenjoey has applied for full ASX participation and will apply for Chi-X and Yieldbroker participation.
It expects its corporate finance business will be operating by next month and its markets business by the middle of next year.