The firm had been plagued by years of high start-up costs. Big deals for Guzman y Gomez and Suncorp, and a broader business, have turned its fortunes around.
Barrenjoey Capital Partners is in the black and paying dividends for the first time since it started four years ago, with its largest shareholder describing the investment banking start-up as “one of Australia’s greatest success stories in the financial markets”.
“The first three years were always going to be heavily impacted by start-up costs and building out the platform,” Magellan chairman Andrew Formica said on Thursday.Now, Barrenjoey was a reason to invest in Magellan, Mr Formica said. “The only way you can get direct access to it is through Magellan because the rest is either owned by Barclays at a lower stake than us, or the employees,” he said during an earnings call.
Bringing new divisions online in the past year has also increased the firm’s profits. In the first six months of the financial year, Barrenjoey made roughly $11 million in profit, but accrued almost $24 million in the half to June 30 as fixed income revenue trickled in and its equity capital markets desk snared more transactions.boosted revenue, and opening a global markets office in Abu Dhabi contributed to its cleared derivatives business.
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