Tech and renewable energy are two sectors that are expected to be much bigger in the years to come, which is why some of the biggest investment banks in the world are getting into the sectors in a big way. Tech is already big, but the scope of growth is still immense, while renewable energy seems like the thing of the future as fears grow with regards to climate change. In a new development, it has emerged that one of Australia’s biggest investment banks Macquarie is all set to raise a staggering $675 million (A$ 1 billion) to invest in technology, renewable energy, and infrastructure.
Three months ago, Macquarie had announced that it had A$5 billion in the capital that had not been invested and at the time, it had raised concerns from analysts. Analysts at UBS stated that if that was the case, then the bank had no reason to sell shares. On the other hand, analysts at Goldman Sachs called it surprising. According to those who are close to the developments, Macquarie is going to offer shares to institutional investors in the price band between A$118 and A$123.5, and it is also believed that there is significant demand for these shares.
The raised capital is going to be allocated in investments in the ongoing quarter only, and another round of fundraising is going to take place with existing investors later on. The bank expects to raise A$300 million to A$600 million in the second round. Shemara Wikramanayake, the Chief Executive Officer of Macquarie, spoke about the whole thing after the announcement had been made. He said,
The raising is intended to ensure that we are well placed to continue to respond to opportunities that are meeting our return benchmarks.
He went on to state that the capital that is being raised is expected to be enough to take care of the investment opportunities and Macquarie is not going to have to return for another round. That being said, the fact that Macquarie raised capital despite having A$5 billion worth of spare cash has raised eyebrows. Banking giant UBS stated in a note,
This raising indicates that Macquarie’s capital position is not as strong as it previously indicated, and further asset recycling is required to enable additional investments without returning to the market.