A security worker stands next to the Macquarie Group logo in central Sydney in this February 9, 2010 file photo.Daniel Munoz/Reuters
Where does Macquarie Capital Markets Canada Ltd. fit between the between the big banks and the boutiques?
It's a question that the Canadian subsidiary of Australia's huge bank has sought to answer for years, and its chief executive officer David Fleck said the company is getting better at recognizing where it can add value to the Canadian landscape.
Macquarie has a global focus it believes the Canadian banks can't match, with more than 14,000 employees working at Macquarie companies, a large international research department and a deep focus on Asia. But identifying the elements that best fit the Canadian marketplace has taken some time, he said.
"The Canadian investment banking market is two-tier, you have the banks and the boutiques – Macquarie is somewhere in the middle, " Mr. Fleck said in an interview between presentations at business school INSEAD's Americas Forum in Toronto on Saturday. (He's an INSEAD alumnus.)
Macquarie's principal investing business is one of the lines Mr. Fleck has his eye on developing in the next five to 10 years. He thinks there may be growing demand in the Canadian marketplace. The division would increasingly supply capital to clients in situations such as pre-IPO expansion, funding new products or expanding in new places, without raising capital from investors.
Mr. Fleck see opportunity here because large banks have largely left the space, and boutique firms don't have the balance sheet to support it.
"A big question mark in Canada is – what are the financing requirements for the middle-market in Canada?" Mr. Fleck said. "The Canadian banks generally have a harder time with that side of the market, I think, just because the risk profile is higher. We've done some financings, but I wonder how deep that is."
Mr. Fleck said that Macquarie is focused on its existing business lines in the coming years, describing the current market as "definitely a 'put-the-helmet-on' environment."
Macquarie is well known in Canada for resources, infrastructure and real estate financing. The company's biggest push into Canada started in 2007 when it led a string of acquisitions that began with the purchase of resource-focused boutique investment bank Orion Financial Inc.
It has taken years for the Canadian business to understand Macquarie Group better, Mr. Fleck said. "It's a twofold thing… You have to get to know the people and you have to get to know the tools so you can actually be effective in offering those in your local market."
( Jacqueline Nelson is a Globe and Mail Financial Services Reporter.)
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