Macquarie reduces funds, advisory staff in US

Though the significant majority of staff were not affected, the reductions reflect local market conditions and a more appropriate scale in the current market environment.

Less than a week after posting a 43 percent decline in its 2009 half year profit, its first results decline in 15 years, Macquarie Group, the largest private manager of infrastructure assets worldwide, has begun to make reductions in staff, according to a person familiar with the matter.

The reductions, focused on its US operations, were made entirely within the Group's former investment banking division, Macquarie Capital, which manages 35 listed and unlisted specialist funds and carries on broader investment banking activities worldwide.

According to the source, the significant majority of US staff in Macquarie Capital were not affected by the decision. Specific numbers were not clear, given that some staff will be given the option to redeploy elsewhere within Macquarie and thus may remain with the firm.

Both professional and support staff were reduced.

Additionally, while staff numbers have been reduced, all business platforms that Macquarie Capital has been building out in the US in recent months, such as infrastructure principal and advisory, restructuring, equity capital markets and private placement, will continue to operate as normal.

Discussing the half year results last week in Sydney, Macquarie Group chief executive officer Nicholas Moore hinted that staff reductions could be a possibility, but stressed that the decision to cut staff would be made by local business leaders rather than by the head office.

In the US, it is understood that the decision was made by the senior management locally who thought it was the right thing in light of opportunities in the current market environment .

Macquarie's US operations are headed by Tim Bishop, formerly the head of Macquarie Capital's diversified industries group in Sydney.

As of 30 September, Macquarie Group had 13,800 staff worldwide. Of that, approximately 1,300 staff members were located across 19 offices in the US, according to its website, which does not yet reflect the reductions.

Macquarie isn't the only global manager of infrastructure assets to announce staff reductions. Last week, Sydney-based infrastructure specialist Babcock & Brown disclosed plans to cut its workforce by more than 800 in an effort to reduce A$3.1 billion (€1.5 billion; $2 billion) of debt. Much of that reduction will be driven by divestments of non-infrastructure activities, the firm has said.