Paul Plewman, Macquarie’s CEO for Europe, the Middle East and Africa, explains to Marie Kemplay the importance of empowering the bank’s staff to seek out new opportunities and of playing to its strengths.

Paul Plewman

Paul Plewman

Innovation and entrepreneurism have been central to Australian investment bank Macquarie’s ethos since it was founded in Sydney in 1969. The bank, which started out as a three-person Australian outpost of former British merchant bank Hill Samuel, has since expanded into 27 countries with a global workforce of 15,000.

Not only was 2019 Macquarie’s 50th anniversary globally, it also marked 30 years since the 1989 opening of its London office, which is now the hub for the bank's Europe, the Middle East and Africa (EMEA) operations. For Paul Plewman, Macquarie Group’s EMEA CEO, the growth of that office over the past three decades is testament to the group’s can-do spirit. “The establishment of the London office in 1989 is a great example of this culture, with two of our people leaving Australia to establish a base in the UK, which has now grown to more than 2000 people,” he says.

Career history: Paul Plewman  

  • 2019 CEO, EMEA, Macquarie Group
  • 2007 Head of commodities and global markets, EMEA, Macquarie Group
  • 2005 Head of joint trading venture between Macquarie and Abu Dhabi Commercial Bank
  • 2002 Head of commodities, Investec Bank, London

Mr Plewman is well versed in Macquarie’s approach to business, having been at the bank for 15 years. The last 12 of those were as EMEA head of commodities and global markets, where he led the commodities, equities, fixed-income and foreign exchange businesses – a role he has continued to perform alongside taking over as EMEA CEO in April 2019. For him, keeping entrepreneurism at the core of what Macquarie does is essential for driving its success into the future, as its “adaptability” will allow it to “keep delivering the solutions our clients want and our communities need”.

Knowing its strengths

Macquarie has always sought to play to its strengths and focus on areas where it believes it can add client value. This has seen it become a leader in the infrastructure, energy, commodities and technology sectors. Mr Plewman believes this approach of not trying to be an “everything to everyone organisation” has allowed it to “move quickly to pursue opportunities”.

In recent years, this approach has seen the bank become a leader in green infrastructure, for example via its green investment group (GIG). The GIG has built on the work of its forerunner, the Green Investment Bank, which was established by the UK government in 2012 and acquired by Macquarie for £2.3bn ($3.07bn) in 2017. At the time it was a relatively controversial acquisition, particularly among some UK politicians and environmental campaigners who were sceptical about how Macquarie would approach running it.

But Mr Plewman is proud of the work Macquarie has done through the GIG since taking it on, and states that it has been able to achieve far more than would have been possible had it still been a UK-government managed initiative. He says: “The number of people working for the business has quadrupled to more than 400, and we’ve invested or arranged more than £4bn in green projects across the UK and Europe in that time. All of this growth has been guided by exactly the same mission and green purposes that the business has had since it was established by the UK government in 2012.”

Although the GIG is still run from the UK, its work now has a strong international footprint and it leads all of Macquarie’s green energy principal investment globally. In the coming years, Mr Plewman says it will focus on “even faster deployment of established technologies such as wind and solar, supporting the emergence of new technologies such as floating offshore wind and batteries, as well as creating new markets through innovative investment approaches, like Power Purchase Agreements”.

Digital connectivity and infrastructure technology are also growing areas for the business, with the group seeking to apply its experience of advancing and developing early-stage infrastructure projects in the digital space. In the past year, it has acquired several broadband businesses such as UK-based providers Voneus and KCOM and a new fibre network in Spain, from Spanish operator MasMovil, which will serve about 940,000 building units.

On commodities, although its particular strength is in oil, gas and power, Macquarie trades more than 115 products across 15 market segments including an extensive range of “illiquid commodities, such as agriculture and soft commodities, pulp and paper and petrochemicals” and it is seeking to further develop its offering here too. Mr Plewman says: “This business is also increasingly playing a role in the intersection of risk management, commodities and renewables by creating new products for clients to help manage risks.”

Scaling back in cash equities

This approach of focusing activity in key areas also means Macquarie is not afraid to pull back where it is doing less well. In October 2019, it announced it would be significantly scaling back its cash equities businesses in EMEA and the Americas.

Mr Plewman is philosophical about the move, saying: “I think every organisation operating in cash equities has seen huge structural change in the market and each will need to decide on a response that plays to their strengths.” For Macquarie at a global level, this means the focus will be on delivering “market-leading Asia-Pacific research, sales and execution”, a market in which Macquarie has been active for more than 25 years.

In Europe, it will no longer directly offer equities trading and research services, instead it has signed a co-operation agreement with French broker Kepler Cheuvreux (KC), who will now sell Macquarie’s Asia-Pacific research to its European client base, and in return Macquarie will sell KC’s extensive European offering to Macquarie’s Asia-Pacific clients.

Mr Plewman says: “The intention here is to create a unique platform that cross-distributes research and trading in our respective regional markets – Europe and Asia-Pacific – and this will make us one of the most significant providers covering these regions.” The team within Europe will be smaller and focused on supporting this strategy, with cross-distribution of European and Asia-Pacific equity research expected to commence early in 2020.

Growth in EMEA 

Mr Plewman maintains that European cash equities is a relatively small part of Macquarie's business compared with other areas, which continue to see growth. At a global level, Macquarie’s 2019 first-half results, announced in November 2019, indicated that the group was on course to deliver its 51st year of unbroken profit. He is pleased with the results for EMEA, with “the region continuing to deliver strong, consistent growth and a record first-half result”. Compared with five years ago, the region has doubled its contribution to the group’s total income, with EMEA income reaching £2bn for full-year 2018, 28% of global total income.

Despite the group’s EMEA operations being based in London, Macquarie does not expect Brexit to have a material impact on the bank's operations. “We began preparing for it in 2017, deciding to seek four new licences in EU countries to allow our business to continue to serve our clients as we do today,” says Mr Plewman. He believes London will remain its hub for the region and the bank remains committed to the UK more generally. “We’ve been one of the biggest investors in the UK since the referendum, recently committing to new, long-term infrastructure projects, such as London’s Silvertown Tunnel," he says. "So, the UK will continue to be an important place for us to invest in and from.”

The group has also expanded activity in other parts of Europe in recent years, including the acquisition of European asset management specialists, such as Luxembourg-based ValueInvest and Munich-based real estate fund GLL Real Estate Partners, to complement its existing strength in corporate advisory in Germany. Mr Plewman adds: “And we see opportunity to do more. That’s why we’ve been investing in senior hires to cover France, central and eastern Europe as well as the Nordics. This is all part of a strategy to grow the business by connecting local experience to global expertise.”

An empowering culture

Finding people with the right skills and attitude to spot those opportunities and take growth forward is very important to Mr Plewman. The organisation is driven from the bottom up, so staff are expected to be confident to generate and push forward their ideas. “We’ve created a highly empowering culture – staff are able to seek out new businesses and are accountable for their success," says Mr Plewman. "That means we can grow into areas where our clients want us, while at the same time staying focused, lean and flexible.”

Mr Plewman believes the fact that Macquarie is responsive to client needs and does not rely on specific business areas for growth is a real strength in the current geopolitical and economic climate, where change and volatility are likely to continue to be a big part of the operating environment.

“Part of our strength is that there has been no single big success story here. We have carefully built a diverse business, meeting the needs of a broad range of clients and communities around the world. The business is balanced by annuity-style and market-facing activities, balanced by geography and underpinned by a strong culture,” he says.

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