Greg Ward Chief Financial Officer Overview of European operations European focus operational briefing and general update Presentation to investors and analysts 14 September 2007
A brief history of Macquarie in Europe 1989 1998 2007 2003: 2005: Dublin 1989: First Rome and 2001: office European Milan 1999: Frankfurt opens presence in offices open 2006: London office opens Macquarie Obtained London and Investment Corporate Zurich Capital Italian banking Munich Banking Advisory office licence Institutional Funds London opens 2007: Stockbroking 1996: Energy trading Financial Mortgages teams hired Moscow Futures London Products Macquarie 2002: Project Munich Renaissance London London Finance Equity Vienna Real Estate JV Macquarie derivatives Macquarie Capital Capital Manchester 1994: 2000: Vienna office Paris London London London branch office opens Corporate opens Advisory established Financial Advisory Real Estate 2004: Products Equity Geneva and Foreign derivatives Paris Paris Exchange Amsterdam Investment Institutional office opens Banking Stockbroking Macquarie Corporate Funds (ING) Research Advisory 1991: London London Structured Real Estate – London Finance MGPA JV Corona Energy acquisition 26
Macquarie European locations and staff* kÉíÜÉêä~åÇë 12 office locations in 8 countries � 2 staff ^ãëíÉêÇ~ã fí~äó= oìëëá~GG= � Over 1,000 staff, 25% of international 98 staff jçëÅçï=EgsF dÉêã~åó staff jáä~å pïáíòÉêä~åÇ 31 staff oçãÉ 8 staff jìåáÅÜ fêÉä~åÇ � Regional base in London dÉåÉî~ cê~åâÑìêí 11 staff wìêáÅÜ aìÄäáå � Representation from all of Macquarie’s ^ìëíêá~ cê~åÅÉ 13 staff rh operating Groups 13 staff sáÉåå~ 883 staff m~êáë içåÇçå j~åÅÜÉëíÉê 27 * At 31 Aug 07. **Joint venture staff in Moscow not included in headcount. No Macquarie office in Moscow
Focused businesses in Europe � Infrastructure and specialist funds management � Corporate finance & advisory services Financial products � � UK investment funds (Open Ended Investment Company) � Lending and asset financing � Institutional cash equities & research � Treasury and commodities activities � Equity structured finance and derivatives � Real estate structured finance � Real estate advisory and funds management � Residential mortgages � Business banking services � Funds management 28
Growth in income and staff European staff growth by Group European income* growth 1200 1,600 Service areas 1,400 1000 FMG 1,200 FSG 800 Headcount 1,000 REG 600 ($Am) 800 EMG 400 600 BSG 400 200 T&C 200 IBG 0 0 '03 '04 '05 '06 '07 Aug- '03 '04 '05 '06 '07 07 Years ended 31 March * Excludes earnings on capital and is after directly attributable costs, including fee and commissions expenses. 29
Treasury and Commodities Group � Metals and Energy Capital — 24hr precious and base metals trading desks operated from Sydney and London, offering spot, forward and option based risk management products. — Member of the London Metals Exchange offering clients trading and clearing services over LME contracts. — Provider of finance to upstream energy companies via equity, mezzanine and senior debt. — Recent initiatives include provision of a substantial loan facility to a Central Asian petroleum explorer. � Agricultural Commodities and Investor Products — Risk management solutions for sophisticated producers, consumers and merchants of agricultural commodities. — Commodity pre-export and inventory financing programs. — Structured derivatives over various commodity indices for the institutional investment community and financial intermediaries. — Dry freight derivatives (Forward Freight Agreements (FFA's) and options over FFA's). 30
Treasury and Commodities Group � Energy Markets — Risk management and financing solutions in energy products (oil, refined products, natural gas & coal). — Physical gas and coal trading. — Corona Energy, natural gas supply to industrial and commercial customers in the UK. — Recent initiatives include the expansion of the UK physical gas supply business into Europe. � Futures — Full service futures global execution, clearing, Direct Market Access and margin financing services to the UK and Europe — Specialist in Freight Clearing with full coverage to the Norwegian Clearing House, London Clearing House, and Singapore exchanges. — Daily management of UK/European Exchanges and clients, including Euronext LIFFE, Euronext LTOM and CME & CBOT clearing. 31
Equity Markets Group Equity Markets Group operates three businesses in Europe: � Equity linked products — Provides equity-linked investment products for high net worth individuals and wholesale clients — Services clients in all major European markets from offices in London and Munich — Bespoke transactions, which may include convertible instruments, warrants and options � Equity finance — Principally, the stock lend & borrow business � Trading — Manages market risk for EMG’s businesses and trades arbitrage opportunities — Growth across the business - staff numbers have more than doubled over the past 12 months 32
Banking and Securitisation, Financial Services and Funds Management Groups � Banking and Securitisation — Residential mortgages — Entered Italy in 2005 — Branches in Milan and Rome with 10 other regional sales points across Italy — Portfolio of €718m* with approximately 100 staff — Mortgages distributed through both third party and direct channels — Recent initiatives — Business banking — Start-up business established in 2007 — Provide business lending services to UK insurance broking industry — Plans to expand product offering, including insurance premium funding � Funds Management Group - building management capabilities in London for global fixed income, European listed property and European private equity funds � Financial Services Group - exploring opportunities to replicate niche product expertise in the region 33 * At 31 August 2007
Specialist fund capital raisings � $A21.6b raised over the 12 months to 31 March 07; $Ab — 79% from international investors 22 — 87% for unlisted funds or syndicates 20 � $A12.4b raised over the 5 months to 31 August 07; 18 — 77% from international investors 16 — 77% for unlisted funds or syndicates 14 12 FY07 Raising 1 Apr – 31 Aug Region 10 ($Ab) Raising ($Ab) Africa & Middle East 0.49 - 8 Asia Pacific 3.33 5.80 6 Australia 4.49 2.81 4 Americas 5.20 1.80 Europe 8.13 2.06 2 TOTAL $A21.6b $A12.4b 0 FY07 Apr - Aug 07 Funds raised by Macquarie and joint venture fund manager partners, including equity raised via DRP. Including committed, uncalled capital. 34 Capital raised includes approx. A$1b of Exchangeable Convertible Bonds (ECBs) issued by MCG
UK licenced banking entity � In conjunction with establishment of Macquarie Group Limited (NOHC), FSA regulated entities have been split between Banking and Non-Banking groups. � The Non-Banking group will use the existing FSA regulated entities - Macquarie Europe Limited & Macquarie Investment Management (UK) Limited Therefore seeking to establish UK licensed banking entity as the platform for future growth for regulated � European ‘Banking’ businesses � As previously advised, application lodged with FSA in July 2007 � FSA has approximately 6 months to approve Expect to be operational by April 2008 � � All major ‘Banking Group’ businesses will be represented � Approximately 100 staff initially � Subsidiary of Macquarie Bank Limited � Will be appropriately capitalised � Will seek independent ratings in due course � Will have its own Board and Executive Committee 35
Managing our international growth � International growth is complemented by the roll-out of prudential framework � Control of Compliance, Financial Operations and Risk Management functions retained by Head Office, complimented with strong regional management International head count growth 3000 30% Business headcount 25% 2500 Risk and operational staff as % of business head count Support Head Count as a % of total Business Head Count 2000 20% Business Head Count 15% 1500 1000 10% 5% 500 0 0% Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 36
Managing our international growth � Same rules apply as in domestic market � Timely and comprehensive reporting on compliance and risk matters � Internal Audit devotes more resources to international businesses � Frequent senior management visits to international offices � Controls over trading payments largely centralised in Sydney � Lending and trading activities concentrated in certain offices � Increasing awareness of Macquarie brand internationally is improving our ability to attract high quality staff 37
Greg Ward Chief Financial Officer Q&A European focus operational briefing and general update Presentation to investors and analysts 14 September 2007
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