Is Macquarie (ASX:MQG) gearing up to ink its next big deal?

The Aussie investment bank could be making another appearance on the acquisition trail.

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Key points

  • Macquarie could be back on the acquisition trail this year if speculation proves correct 
  • The bank is reportedly getting ready to go head-to-head with a competing global investment firm to acquire Westpac's wealth management arm
  • Over the past 12 months, the Macquarie share price has risen 26% but is down 11% this year to date

The Macquarie Group Ltd (ASX: MQG) share price closed higher on Tuesday, up 1.26% at $183.05.

However, it's been a tumultuous start to the year for the banking giant's shares which have lost almost 11% since trading began on January 4.

Last year it eclipsed the $200 per share mark – one of only several ASX players to do so.

Meanwhile, as a sector, Australian financials – indexed by the S&P/ASX 200 Financials index (XFJ) – have weathered the volatility of 2022 well. The index is up almost 7% this year and is now outpacing the broader S&P/ASX 200 Index (ASX: XJO), which has gained 4.5%.

Those seeking to wind back exposure to growth and regain safety in value-oriented stocks have sought haven in Australian bank shares this year.

Their decisions are backed by strong dividend and/or buyback regimes some of the banks are producing. Hence why it is surprising to see the globally-positioned Macquarie struggle so far.

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Is Macquarie heading back to the auction block?

It is understood Macquarie may be eyeing up the wealth management arm of Westpac, apparently worth $1 billion.

According to reporting from The Australian, the investment bank could go head-to-head with American global investment giant Kohlberg Kravis Roberts (KKR) in a battle to secure Westpac's BT Panorama platform.

KKR is an investment specialist that has presence in multiple alternative asset classes, such as private equity, energy, infrastructure, real estate, credit, and hedge funds.

Curiously, there's a lengthy relationship between Macquarie and KKR dating back several years. During that time the pair has worked on deals both together and against each other.

KKR also boasts a 55% stake in Colonial First Estate via a joint ownership with Commonwealth Bank of Australia (ASX: CBA).

Reportedly, Westpac's BT Panorama wealth management platform, which assists advisors with investment, self managed super fund (SMSF), and superannuation clients, is being valued at 17–18x EBITDA, and oversees north of $105 billion.

Macquarie on the other hand grew its assets under management (AUM) to $750 billion last year. This came after an impressive period of growth across all segments – particularly commodities.

As such, the investment bank is a hot contender to buy the platform. It could be a good fit seeing as Macquarie is itself a financial services company.

However, KKR has been a major frontrunner to acquire the unit. The company wrapped its tentacles around BT Panorama last year but the deal was put on hold until things settled with Colonial First Estate.

It remains to be seen what Macquarie's next moves are and there have been no market-sensitive updates on the matter.

The speculation flows on from news out of Macquarie yesterday in which its CEO weighed in on the future of green hydrogen in Australia.

Macquarie share price snapshot

Over the past 12 months, the Macquarie share price has shot up by 26%. However, unlike many of its banking peers, it has receded almost 11% this year to date.

It has been trading sideways over the past month and is down 4% over the past week.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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