A new ASX listed investment bank

A new ASX listed investment bank

In a deal announced today, Magellan Financial Group (ASX: MFG) will buy Barrenjoey Investment Bank. For long-term investors, it could offer the opportunity to invest in another ASX-listed investment bank. Could this be the next Macquarie Bank?

Of course, there’s still a long way to go from Barrenjoey’s $1.6 billion valuation to Macquarie’s $76.3 billion market cap, so this blog will limit itself to examining today’s deal without commenting on valuation or predicting share prices.

For those who may not know, Barrenjoey is the Australian investment bank’s ‘special ops’ team. Founded in 2020 by a group of heavyweight bankers who defected from global investment banking giant UBS, the company immediately became Australia’s insurgent, taking on the Wall Street establishment in deals.

The name “Barrenjoey” is an Aboriginal word meaning “young kangaroo” and signified the bank’s identity as a fast-moving, local champion. Backed by the financial strength of Magellan and Barclays, it quickly grew into a full-service financial powerhouse with more than 450 employees and offices stretching as far as Abu Dhabi and Hong Kong.

In terms of services, Barrenjoey operates three main engines: corporate advisory (helping companies with multi-billion dollar mergers and acquisitions), equity and fixed income markets (stock and bond trading for large institutional investors) and research.

Despite his youth, Barrenjoey has quickly achieved ‘elite’ status. It consistently ranks in the Top 5 of the Australian M&A League Tables and often appears as the only domestic company alongside global banks such as Goldman Sachs and JPMorgan. Its prestige is further enhanced by its board, which includes such luminaries as former Reserve Bank of Australia (RBA) Governor Philip Lowe and highly respected businessman David Gonski, making the bank widely regarded as Australia’s premier independent investment bank.

Dealmakers

Barrenjoey is often said to have an ‘unparalleled rolodex’, which is why he often appears as the only Australian ’boutique’ bank alongside global giants such as Goldman Sachs and JPMorgan on these multi-billion dollar mandates.

• Steel Dynamics / BlueScope Steel ($15.0 billion): Barrenjoey is currently advising on US Steel Dynamics’ massive 2026 bid for Australian steel icon BlueScope.
• Ramelius Resources / Spartan Resources ($4.2 billion): A major move into the gold sector, with Barrenjoey playing a central advisory role.
• Gold Fields / Gold Road Resources ($3.7 billion): Another high-stakes mining consolidation deal involving the highest level of legal and financial advice.
• Northern Star Resources / De Gray Mining ($4.8 billion): Continue their dominance in the resources sector with this gold mining partnership.
• WiseTech Global / E2open ($3 billion): Advised Australian technology giant WiseTech on its significant US software acquisition.
• Myer / Premier Investments ($900 million): handled the complicated deal involving Myer’s acquisition of Premier’s clothing brands (Just Jeans, Portmans, etc.).

In addition to selling companies, Barrenjoey has also been the ‘go-to’ for raising cash and restructuring balance sheets:

• TPG Telecom ($3.0 billion): Advised on a capital return and subsequent reinvestment plan.
• Greatland Gold ($3.5 billion): Managed the high-profile dual listing and capital raising for the explorer.
• Virgin Australia ($685 million): Acted as lead manager for Virgin’s highly anticipated return to the ASX (IPO).
• Powerco ($2.0 billion Strategic Review): Hired by QIC to review New Zealand’s largest electricity distributor.

League status and rankings

In the world of investment banking, League Tables are the official scorecards. In the calendar year 2025, Barrenjoey has achieved the following:

• Top 5 Ranking: Consistently ranked in the Top 5 for Australian public M&A by deal value, often outperforming older, established companies such as Macquarie and Citi.
• Revenue Milestone: Reported a staggering $522 million in revenue through 2025, an incredible feat for a company only five years old.
• Global expansion: While focused on Australia, they opened new offices in Hong Kong and Abu Dhabi in 2025 to better connect global capital to Australian deals.

Magellan wants to take over Barrenjoey

By merging with Barrenjoey, Magellan (ASX: MFG) becomes a diversified financial services and investment bank. Even if the stock market is flat and people aren’t investing in funds, Magellan can still earn income from Barrenjoey’s advisory fees and trading.

MFG’s acquisition of Barrenjoey could also provide investors with another option to invest in a growing investment bank alongside major players such as Macquarie Bank and mid-market companies including MA Financial Group (formerly Moelis) (ASX:MAF), Bell Financial Group (BFG) and Euroz Hartley (EZL).

When Barrenjoey was just a startup in 2020, Magellan, led by Hamish Douglass, played the role of a high-end venture capital (VC) firm, giving Barrenjoey $156 million in exchange for an “economic interest” of about 40 percent in Barrenjoey’s profits, but almost no say in how the company was run, with only about 5 percent of the voting power.

On March 2, 2026, Magellan announced its move from a silent partner to purchasing the remainder of the company to create a single, diversified financial company and to clean up the complex ownership structure established in 2020.

The two companies agreed that all of Barrenjoey is worth about $1.6 billion. Because Magellan already owned a fair amount of that value through its initial investment, it only needed to buy the remaining portion it didn’t already own.

For the remaining approximately $900 million, Magellan will issue 106 million new shares of its own stock and hand them over to Barrenjoey employees in exchange for their Barrenjoey ownership.

It’s worth noting that an investment bank’s only real assets go up and down the elevator every day. To prevent the Barrenjoey stars from taking the money and walking away, the deal includes a bond with the founders committing for nine years and the remaining staff for an average of 5.5 years. If a staff member leaves prematurely, he loses his commitment, leaving the ‘brains’ of the company in place.

The details

1. The cash payments: Buying out Barclays

Before the full merger could take place, Magellan had to simplify the ownership structure of its partner, Barclays.

Magellan has reportedly agreed to purchase an incremental 10 percent stake in Barrenjoey directly from Barclays for approximately $148.9 million in cash, and to finance this through a $130 million capital raising via an institutional placement, and $20 million through a retail Share Purchase Plan (SPP), both at the current share price of $8.45 per share.

2. The share issue

The bulk of the deal – buying the remaining approximately 53 percent of Barrenjoey owned by its staff and founders – is a pure share swap.

Magellan will issue 106,838,520 new MFG shares, which at a price of $8.45 are worth approximately $903 million.

These shares, subject to escrow, will go to the founders and employees of Barrenjoey (92.6 million) and other minority partners.

Once the dust settles in mid-2026, ownership of the combined structure should be as follows:

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Roger Montgomery is the founder and chairman of Montgomery Investment Management. Roger has more than three decades of experience in fund management and related activities, including equity analysis, equity and derivatives strategy, trading and securities brokerage. Before founding Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.

He is also the author of the best-selling investing guide to the stock market, Value.able – how to value and buy the best stocks for less than they are worth.

Roger regularly appears on television and radio, and in the press, including ABC radio and TV, The Australian and Ausbiz. View upcoming media appearances.

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