KEY POINTS:
The head of Australasia's most aggressive investment bank says this year's stock market wobbles are not serious enough to cause serious concerns about the world economy.
Macquarie Bank chief executive Allan Moss, in New Zealand for the opening of a new Auckland office, said the corrections that have
taken place in global markets had not changed the bank's strategy to any material degree.
"Our view is that the world economy is in pretty good shape and we're expecting pretty good growth around the world," he said.
Macquarie has been at the forefront of an investment boom in Australasia in the past few years as infrastructure assets and listed companies have been snapped up at prices causing some commentators to suggest the market is overheated.
Moss, who has been chief executive for 14 years, has been a key player in the boom.
He has led the bank through a period of global expansion - from offices in Australia, New Zealand and London - to a presence in more than 20 countries.
When Moss started with Macquarie 30 years ago it had just 50 staff; it now has more than 10,000.
With listed investment funds owning assets in sectors as diverse as retirement homes, airports, roads and even 10-pin bowling alleys, the bank has attracted plenty of critics nervous about its dominance in the region.
But Macquarie should not be grouped in with the private equity players that some blame for fuelling an investment bubble, Moss said.
The difference was that Macquarie would not need to find an exit strategy for its assets any time soon.
"Our basic model is to buy and hold," he said. "Most of the assets that are in our infrastructure funds and in our real estate funds are assets we've held for a long time and we have no plans to divest them."
And although he accepts there have been some high prices paid for assets he doesn't believe there is an investment bubble in the region.
Neither is he prepared to lay the blame with private equity. Instead he points to an ageing population planning its retirement.
"The pricing of assets around the world has blown up over the years but it's not just a private equity story. It's a story of global liquidity," he said.
"Large sophisticated investors ... are looking for assets that have cashflows that match their obligations to their members. Pension funds are very conscious that the baby-boomers are coming up to retirement."
Record prices might raise eyebrows but they don't necessarily mean investors are taking great risks.
"If you really know what you are doing you can get assets that are really good value even though you have to pay the top price."
He cites the example of Chicago Skyway - a 12km toll road that Macquarie and a partner paid US$1.83 billion ($2.56 billion) for in 2004.
"A lot of people said we paid a price that was too high," Moss said. "And now most analysts say we have doubled our investors' money. That's because we made some operational changes that improved that tollway."
Moss - whose optimism appears to have served him well so far - is also unconvinced by those who say there are a limited number of good investment opportunities left in Australasia.
"There are new companies coming on all the time," he said.
"Sometimes it seems like there are so many takeovers going on that they are all going to disappear, but there are lots of great companies around that weren't here 10 years ago or even five years ago. There is a constant process of renewal."
He believes that around the globe the process of industry consolidation still has a long way to go.
And that definitely includes New Zealand, although Moss would not be drawn on where or when Macquarie's next big local investment might be.
