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Australia’s six-year-old investment banking upstart Barrenjoey has agreed a merger with asset manager Magellan that will create a new rival to Macquarie.
Barrenjoey, which means ‘young kangaroo’, was launched by former UBS rainmakers Matthew Grounds and Guy Fowler in 2020 and went on an aggressive poaching spree that shook up Australian dealmaking.
The deal values Barrenjoey at A$1.6bn (US$1.1bn). Along with Barclays of the UK, Magellan Financial Group was a founding shareholder and has a 36 per cent stake. It will acquire the shares it does not own for around A$900mn.
With the combined group intending to push into private capital, the deal highlights the rapid valuation creation that is possible with a successful investment banking boutique.
Barclays will reduce its stake in the new company to 4.9 per cent by selling shares worth A$149mn. Barrenjoey said that would simplify compliance with US regulations.
Barrenjoey’s launch in 2020 was later dubbed “bloody Monday” as top bankers were poached in rapid succession.
The strategy proved successful as the young bank beat its larger rivals to advisory work on some of Australia’s biggest deals, including the sale of Sydney Airport, energy company Origin’s talks with Brookfield, the float of burrito chain Guzman y Gomez and BHP’s takeover of Oz Minerals.
The bank has regularly topped league tables for mergers and acquisitions and equity capital markets in Australia despite competing with some of the largest European and US banks. It reported revenue of more than A$500mn and net profit of A$108mn in 2025, according to Magellan.
Grounds and Fowler have maintained a high profile, appearing alongside top executives from BHP and Woodside in the stands at the Australian Open tennis tournament. The bank celebrated its fifth anniversary last year with a glitzy party at the Sydney Opera House attended by Australia’s business elite as well as Barclays chief executive CS Venkatakrishnan.
The deal is aimed at increasing Magellan’s exposure to private market opportunities and making the combined business, with a A$2bn balance sheet, more competitive against the likes of Macquarie.
Magellan, which has former Australian rugby player John Eales on its board, has withered since it first invested in Barrenjoey. Its relationship with the UK’s St James Place collapsed and star stockpicker Hamish Douglass exited in 2022. Shares in the asset manager have fallen more than 80 per cent in five years.
Shareholders in Magellan will hold 58 per cent of the merged company at completion, compared with 32 per cent for Barrenjoey staff and investors, but the top roles at the combined business will go to the investment bank. Grounds and Fowler have locked in their company shares into escrow for nine years.
“[Magellan] has been part of our journey from the beginning of Barrenjoey as a founding investor,” Barrenjoey chair David Gonski, who will chair the merged company, said. “Joining forces provides an ideal platform for our next phase of growth together as a top-tier financial services group.”
Venkatakrishnan said the merger was an “endorsement of Barrenjoey’s long-term trajectory,” adding: “Our priority is to continue to serve clients in Australia with excellence by leveraging Barclays’ global capabilities and Barrenjoey’s local expertise.”
