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 provide the opportunity to invest in another ASX-listed investment bank. Could it be the next Macquarie Bank?

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

For those who might not know, Barrenjoey is the “special ops” team of Australian investment banking. Founded in 2020 by a group of heavyweight bankers who defected from the global investment banking giant UBS, the firm immediately became the Aussie insurgent, going head-to-head with the Wall Street establishment on deals.

The name “Barrenjoey” is an Aboriginal word meaning “young kangaroo,” and signalled the bank’s identity as a fast-moving, local champion. Backed by the financial muscle of Magellan and Barclays, it quickly grew into a full-service financial powerhouse with over 450 staff and offices extending 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 & Fixed Income Markets (trading stocks and bonds for major institutional investors), and Research.

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

Deal makers

Barrenjoey is often described as having an “unrivalled rolodex”, and consequently it frequently appears as the only Australian “boutique” bank alongside global giants like Goldman Sachs and JPMorgan on these multi-billion-dollar mandates.

• Steel Dynamics / BlueScope Steel ($15.0 billion): Barrenjoey is currently advising on the massive 2026 bid by U.S.-based Steel Dynamics for the Australian steel icon, BlueScope.
• Ramelius Resources / Spartan Resources ($4.2 billion): A major move in the gold sector where Barrenjoey played a central advisory role.
• Gold Fields / Gold Road Resources ($3.7 billion): Another high-stakes mining consolidation deal involving top-tier legal and financial advice.
• Northern Star Resources / De Grey Mining ($4.8 billion): Continued their dominance in the resources sector with this gold mining tie-up.
• WiseTech Global / E2open ($3 billion): Advised Australian tech giant WiseTech on its significant U.S. software acquisition.
• Myer / Premier Investments ($900 million): Handled the intricate deal involving Myer’s acquisition of Premier’s apparel brands (Just Jeans, Portmans, etc.).

Beyond selling companies, Barrenjoey have 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 raise for the explorer.
• Virgin Australia ($685 Million): Acted as a 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.

Status and “League Table” Rankings

In the investment banking world, League Tables are the official scorecards. In the 2025 Calendar Year, Barrenjoey achieved the following:

• Top 5 Ranking: Consistently ranked in the Top 5 for Australian Public M&A by deal value, often outperforming older, established firms like Macquarie and Citi.
• Revenue Milestone: Reported a staggering $522 million in revenue for the 2025 period, an incredible feat for a firm 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 with Australian deals.

Magellan to acquire Barrenjoey

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

Barrenjoey’s acquisition by MFG may also give investors another option to invest in a growing investment bank alongside major players like Macquarie Bank and mid-market firms, 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, under Hamish Douglass played the role of high-end venture capital (VC) firm, giving Barrenjoey $156 million in exchange for a roughly 40 per cent ‘economic interest’ in Barrenjoey’s profits but almost no say in how the business was run, with only circa 5 per cent of the voting power.

On March 2, 2026, Magellan announced its move from being a silent partner to buying the rest of the company to create a single, diversified financial firm 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. Since Magellan already owned a decent chunk of that value through its initial investment, it only had to buy the remaining portion it didn’t already own.

For the remaining circa $900 million, Magellan will issue 106 million new shares of its own stock and hand them to the 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 lift every day. To prevent the Barrenjoey stars from taking the money and running, the deal includes an escrow with founders committed for nine years and the remaining staff for an average of 5.5 years. If a staff member departs early, they forfeit their stake, ensuring the ‘brains’ of the business stay put.

The details

1. The cash payments: buying out Barclays

Before the full merger could proceed, Magellan needed to simplify the ownership structure of its partner, Barclays.

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

2. The share issue

The larger portion of the deal – buying the remaining circa 53 per cent of Barrenjoey held by its staff and founders – is a pure share-for-share swap.

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

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

Once the dust settles in mid 2026, the 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 over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.

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

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

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.