Macquarie Bank expands in U.S.

Macquarie Bank, an Australian institution that is expanding its private equity activities worldwide, is setting up a fund-of-funds and advisory practice in Carlsbad, Calif., PE Week has learned.

Many details of the practice are not known, but the group seeks to participate in buyouts, venture capital and special situations, which include energy, distressed investments and secondaries deals.

The move is noteworthy since Macquarie has up to now been relatively inactive in the United States. Peter Martenson, president of Macquarie Funds Management, the U.S. division of the Australian bank, acknowledged that the group is staffing up. Martenson says that Macquarie deploys capital from the $2 billion in assets that his division has under management.

Martenson, and Senior Vice Presidents Eric Becker and Rick Fratus, worked together for most of the last five years in the private equity group at La Jolla, Calif.-based Pacific Corporate Group (PCG), which they left April of 2005. Martenson says that he and his partners were approached last year by Macquarie Bank, which had been an advisory client of the group at PCG, and were asked to help Macquarie expand its private equity investment portfolio worldwide.

PCG is probably best known as the first advisor to the California Public Employees’ Retirement System. Given their experience at PCG and Macquarie’s deep pockets and aggressive attitude towards expanding worldwide, Martenson says that the group hit the ground running and have invested in funds managed by Blackstone, Charterhouse, Carlyle Asia and Riverstone Renewable (a joint venture of Riverstone with Carlyle in energy).

Martenson refused to name any VC funds, but he said that the group has invested in top quartile U.S. funds since the FoF was launched last year.

Macquarie’s fund management group includes parallel organizations in Australia and Hong Kong.

Separately, Robert Xie, former head of the Bank of China’s private equity effort in Hong Kong, has also joined Macquarie in China, to head up private equity direct investments there. But Xie told PE Week in a separate interview that it was to early for him go on the record about Macquarie’s efforts that he will direct in China.