It was not always certain that Paul Plewman, the Irish chief executive of Macquarie Europe, would end up with a career in the high-flying world of investment banking. The Kildare native was “earmarked” to follow his family into more agricultural pursuits and “for many years”, he says, his main ambition was to become a farmer.
Now in his fifth year at the helm of the Australian firm’s rapidly expanding European division, Plewman and his employer are reaping the benefits of its carefully cultivated investment strategy. The unit headed by Plewman was Macquarie’s third-largest revenue producer last year behind the United States and Australia, contributing almost €2.9 billion in net income, a quarter of the total.
Aside from the investment banking side, Macquarie also has a substantial global markets business, one of the biggest commodities trading units in the world. Profits at the Sydney-listed group rose to 5.18 billion Australian dollars (€3.1 billion) in the year to March 31st, according to the bank’s annual report, a record that also topped analyst estimates and was driven largely by volatile energy prices.
So it is no stretch to say that Plewman is well placed to express an informed opinion about the trajectory of energy bills this year. He says that while winter energy prices are not expected to rise to the heights seen last year, nothing can be taken for granted at the moment.
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“A lot is obviously weather dependent,” he says. “Last year, everyone got away with it in terms of it being a very mild winter in the UK and Europe. But the system doesn’t last that long in terms of storage – I’m talking about gas storage in particular – so I think a lot of people are nervous about what the weather could do.”
That said, Europe and Britain are more resilient than when the invasion of Ukraine kicked off an energy price spiral in early 2022, Plewman believes. “The first time we had that squeeze, it was a big scramble, of course. Corporates, industrials were trying to work out what to do, how to manage the consumption, and financiers were working out how to manage the risk. If we do have a cold winter and a spike, I think people will be more prepared.”
However, it is still “a system that has risk in it”, Plewman warns. “It seems to be [that] people feel, I think, it’s under control but maybe the question is: are we are we a bit complacent about how it will play out over the winter?”
Plewman was speaking to The Irish Times last week on one of his regular visits to Dublin from his adopted home, London, where Macquarie has its main base of European operations. Rather than a routine check-in with the Dublin office, the executive was in the capital to help celebrate the 20th anniversary of the bank’s initial entry into the Irish market.
[ Macquarie keen to grow Irish business amid bumper resultsOpens in new window ]
Over those two decades, Macquarie has built up a formidable portfolio of Irish assets. It has a substantial aviation finance business here, comprising a fleet of about 250 aircraft that it owns and leases out.
Macquarie Ireland has also invested €2 billion in infrastructure and public-private partnerships in areas like social housing and education and is hungry for more. Most recently, it has acted as equity sponsor and financial adviser to the Enbarr Partnership, a consortium that won a €250 million Department of Higher Education contract to deliver a total of 5,000 extra student places across four colleges in Dublin, Cork, Kerry and Westmeath.
A Macquarie-led group also built the east and central quad buildings that form the core of Technological University Dublin’s (TUD) Grangegorman campus.
Waste and renewables are the third pillar of the business here, having acquired Beauparc Utilities, the State’s largest waste company and parent to both Panda Waste and Greenstar, for a reported €1 billion in 2021. Macquarie is also developing 400 megawatts of offshore electricity generation at the Sceirde Rocks wind farm off the Connemara coast.
Non-hierarchical structure
For most its two decades in Ireland – 18 years, to be precise – Plewman has been part of the Macquarie team. Equipped with a computer science degree from Trinity College Dublin, he left Ireland in the 1990s for South Africa, where he worked on the other side of a Macquarie joint venture, experiencing first-hand the Australian firm’s approach to business development and non-hierarchical structure.
“It’s not something we just say but there is no top-down diktat of instruction as to what we should do, where should operate,” Plewman tells The Irish Times. “It’s more about hiring good people who know how to operate and can own the risk and be accountable.”
As such, he says Macquarie’s presence in Ireland has something of the happy accident about it.
“We never said: ‘We want to do business in Ireland,’” Plewman says. “It didn’t come from someone saying we have to have a strategic push into Ireland. It wasn’t strategy. It was more people on the ground, largely in London, trying to find new ways to generate revenue and spotting an opportunity.”
Starting with a team of two or three, Macquarie now employs about 100 people at its offices on Mespil Road in Dublin and in Limerick city where it operates a helicopter leasing company. Ireland – where the firm has increased its headcount by about 80 per cent in the past two years or so, Plewman says – is also Macquarie’s European Union regulatory hub, having secured both an investment firm and banking licence here in 2019.
Plewman says the changes he has seen across the Irish economy and, indeed, society over the course of his 18-year career have been astonishing. “It’s been quite the journey,” he says. “I left Ireland in 1995-’96 and it was around the time the economy was starting to look like something might be changing. Prior to that, I grew up in an environment with challenging economic conditions. Clearly, there was a big push, right until the financial crisis, that changed things significantly.”
It was really after the crash, when liquidity was tight, that Macquarie spotted the opportunity to begin ramping up investment here. The bank’s modus operandi is to go into crises with “a huge amount of excess capital”, Plewman explains. “We’ve always been very sensible holders of capital. That’s allowed to us go through crises without doing anything too drastic but also, it’s allowed us to invest and look at new markets.”
It seems a prudent strategy in a world where there is broad consensus that the frequency of global economic and geopolitical shocks over the past decade has been increasing.
As a small, open economy, Ireland appears to be in the firing line as much any other wealthy country but Plewman says the resilience shown here has been remarkable from an external perspective. “It’s amazing how the economy gets through them,” he says. “Some of [the shocks], if you had the same event 15 years ago, would have almost destroyed parts of the economy whereas now people are more used to it and more focused instead of panicking.”
