By Cezary Podkul
NEW YORK, March 27 Macquarie Bank is
expanding its power trading business in the UK, hiring traders
from rival banks and sourcing electricity from newly acquired
power plants in hopes of becoming a bigger player in the sector.
The Australian banking group has hired six traders and
acquired two power station management agreements in the UK in
recent months as part of the expansion, Nicholas O'Kane, global
head of Macquarie's Energy Markets Division, said in an
"We have, in the last three to four months, taken the
opportunity to build up that business," O'Kane said, pointing to
client requests as the reason for the expansion.
The move highlights the growth opportunities available to
some financial players as others have retrenched and cut back
their commodity operations in the face of regulatory and
It also shows the growing attractiveness of the UK power
market, where prices spiked to an all-time high last week thanks
to a pipeline malfunction that exposed the country's increasing
reliance on foreign energy supplies.
To beef up its UK power operations, Macquarie has hired
Turab Musayev as vice president of power origination and
structuring and Max Hacker as energy analytics analyst, O'Kane
said. Four gas and power shift traders, Adam Frame, Dan Briggs,
Sid Rajeswaran and Tim Sheldrake have also joined Macquarie.
Musayev, Hacker, Frame and Sheldrake joined from Bank of
America's Merrill Lynch unit. Briggs joined Macquarie
from French utility EDF and Rajeswaran joined from BNP
The six traders have joined a team of about 15 people in
Macquarie's UK gas and power trading desk in London, reporting
to Jon House and Erik Petersson, co-heads of Macquarie's energy
markets division for Europe, Middle East and Africa, according
to a spokeswoman.
The division has also acquired agreements to manage
electricity output from two gas-fired UK power plants, which
Macquarie is using "as a base to build-out our physical power
business," O'Kane said.
The power stations, the 489 megawatt Baglan Bay Power
Station in Wales and the 819 megawatt Sutton Bridge Power
Station in Lincolnshire, were recently acquired by a
Macquarie-led consortium, according to the spokeswoman.
The Sutton Bridge deal closed Wednesday while Baglan Bay was
completed in October 2012, she said. Terms of the transaction
could not be learned by press time.
Macquarie launched its energy markets division in London in
2003, when O'Kane moved from Asia to the UK to set up its
trading desk. Since then, Macquarie has become an active player
in the UK natural gas sector but less so in power, O'Kane said.
Macquarie's expansion into the sector coincides with a
larger transition in commodity trading among global banks. Stung
by losses from the 2008 financial crisis and increasing
regulatory requirements, many U.S. and European banks have been
scaling back their commodities arms. Royal Bank of Scotland
Group, for instance, was forced to sell its Sempra
Energy commodity trading venture in 2010 after it was bailed out
by the UK government.
Some see the retrenchment as an opportunity for banks like
Macquarie to pick up talent in the UK and other markets.
"Extensive layoffs in the UK and elsewhere in commodity
units have provided a rich opportunity for banks that weathered
the storm to expand or move into active markets," said George H.
Stein, managing director of Commodity Talent, an executive
search firm for commodity traders in New York.
"The European gas and power markets are particularly
attractive zones for banks as they undergo regulatory and market
shifts," Stein said.
Macquarie has also added to its power trading team in the
United States. The firm recently hired Drew Inman in Houston,
Texas to head up its power trading for the Texas market. Inman
will be joining three other traders and a team of business
originators focused on the Texas electric grid, O'Kane said.
Inman is joining Macquarie from Citigroup and will start on
April 8, O'Kane said.