Episode 3 Transcript

Macquarie Podcast Series featuring Commodities and Global Markets

Speakers: Julian Liddy with Alice Farr

Recorded on 21 May 2020.

 

Transcript

 

00:00:05

Voiceover: Welcome to the Macquarie Podcast Series featuring Commodities and Global Markets.

 

00:00:10

Alice Farr: Hello everyone, my name is Alice Farr and I'm a Graduate at Macquarie. I'm excited to welcome you to the third episode in our Macquarie Podcast Series featuring Commodities and Global Markets.

Today, I'm pleased to welcome Julian Liddy, our Regional Head of Specialised and Asset Finance in EMEA. It's also the area of the business I work in at Macquarie. Julian, thanks for joining us today. Before we move onto Specialised and Asset Finance, or SAF, can you start by telling us a bit about your career and how you got to where you are?

 

00:00:35

Julian Liddy: Sure, thanks Alice, it's a pleasure to be here today. So I started at Macquarie as an Intern back in December 2000, straight after the Sydney Olympics. I stayed on after my internship for a while and worked on a part-time basis for a couple of years while I finished my university studies. I then spent my last semester of university on exchange in the US and then started as a graduate in 2003, after a couple of months of travel around the US and South America.

I've been fortunate to work across four operating groups during my time at Macquarie in a number of locations. I’ve spent the last 16 years in London which I've really loved. I'm really interested in technology and in particular sustainability and renewables - my job has been fantastic in this regard.

 

00:01:20

Alice Farr: You've been at Macquarie for almost 20 years. If we go back to the beginning of your career, what advice do you wish someone had given you?

 

00:01:26

Julian Liddy: Well I've been fortunate to have received lots of advice over the years both from my family and from work colleagues but two pieces of advice have really resonated with me.

The first is that old saying that in life and your career, it's a marathon and not a sprint. The advice I was given was to think about my career over the next five to ten years rather than just the next six to twelve months. This has really helped me focus on what I think is really important in the medium term and to work backwards in terms of short-term goals and objectives.

In terms of work, the advice I received was to choose a field or a job that you're really interested in. It's much easier to have fun at work if you really enjoy what you do and have a genuine interest in whatever it is that you're doing.

 

00:02:07

Alice Farr: Thanks, Julian. That's really good advice. So, what would you say is the most defining decision of your career and why was it so important?

 

00:02:14

Julian Liddy: Well I think the most defining decision in my career was moving from Sydney to London back in 2004. For me, London opened up my eyes to how business is done on scale on the international stage. I've had extraordinary exposure to all sorts of opportunities that I would not have otherwise seen were it not for being in London.

 

00:02:32

Alice Farr: And has there been one person who was particularly influential in your career and what was so special about them?

 

00:02:37

Julian Liddy: I've been lucky to work for some fantastic people throughout my career, my current boss included of course. We've actually worked together for a long time and he's an incredibly strategic thinker.

One of my old bosses, who's now the CEO of an Australian green energy business similar to our own Green Investment Group, was particularly influential in my career. He was a hugely charismatic guy who was great with people but at the same time had a razor sharp mind and a knack of helping his team arrive at the right solution to a particular problem without telling them what to do and that's a great skill.

 

00:03:09

Alice Farr: And what are your interests and passions outside of Macquarie when you get time to relax?

 

00:03:12

Julian Liddy: I have five young kids so I don't have much time for interests and passions outside of my family. Having a bunch of kids is fantastic but much to my wife's disappointment I think it gives me a great excuse to behave like a kid on the weekend.

Recently, my eight-year-old son has been teaching me how to play chess. We play a couple of times each week and although I've only just started, I’ve found chess very relaxing. My son beats me fairly consistently but I managed to beat him for the first time last weekend.

 

00:03:41

Alice Farr: Thanks for that personal insight, Julian. So turning to SAF, can you give us an overview of what the business does?

 

00:03:46

Julian Liddy: Sure, so SAF is the specialist asset finance and lending business of Macquarie. Our business is really about providing tailored asset finance and lending solutions to our clients. That can range from advancing a loan to a shipping business to purchase a ship through to funding Apple iPhones for large telecommunications businesses or working with energy retailers to fund the deployment of smart meters.

Our business is centered around our clients and their needs. A key feature of our business is our deep industry expertise. This enables us to understand our clients' challenges and provides us with insights in terms of potential solutions.

 

00:04:26

Alice Farr: If we focus on a couple of sectors where SAF has a presence, there's a lot of interest in new energy sources and energy efficiency. How are we helping with this transition?

 

00:04:34

Julian Liddy: Thanks, Alice, that's a great question. SAF is right in the middle of the energy transition taking place across the world. Smart meters are an enabler of greater energy efficiencies - they provide consumers with more data about how much energy they are using. We're involved in funding more efficient devices in homes and businesses such as biomass boilers, rooftop solar and batteries.

We're also spending a lot of time working with clients as they make the transition to lower emissions and cleaner forms of energy. In particular, we are working with a number of transportation clients to help them transition to a zero-emissions fleet.

Typically, this involves replacing vehicles powered by internal combustion engines to vehicles powered by batteries and electricity and the associated charging infrastructure. However, increasingly we're finding that there is a growing awareness and interest in hydrogen, particularly in heavy transportation and this is a really exciting development for us.

 

00:05:28

Alice Farr: Another sector where we have a strong position is technology, media and telecoms. Can you tell us about the innovative work we're doing in areas such as smartphones?

 

00:05:35

Julian Liddy: Yeah, our TMT team have been working with global telecos and handset manufacturers for many years, developing and deploying innovative ways of funding handsets and other devices for corporates and consumers.

The team have really focused on how to play their part in making the industry more sustainable and reduced the level of environmental impact. In particular, how to ensure that handsets are not single use but rather re-used throughout their life cycle. They recently released a really thought-provoking white paper on this topic.

We're heavily involved in a number of the new subscription models popping up across the world which enable mobile phone users to upgrade their phones as long as their old phone is returned in good working order. We think that being able to demonstrate the sustainability of these products including working towards and being carbon neutral is going to be critical for telcos and handset financiers in the future.

 

00:06:24

Alice Farr: In the first episode of the podcast series, Head of Commodities and Global Markets, Nick O'Kane, mentioned the growing of the SAF business within Europe and expanding our smart meters portfolio as areas of opportunity. Can you take us through how you see the business developing? 

 

00:06:37

Julian Liddy: Yeah, well as you’re aware Alice, we have a business in the UK which owns more than 10 million gas and electricity meters. Many of these are in the new generation of smart meters which enable businesses and households to better manage their energy usage and helps networks with issues like power outages and grid efficiency.

We've been in this business for 16 years and have developed a significant amount of expertise. We're working on exporting that expertise to other parts of Europe where the regulatory framework enables commercial propositions. In particular, we're exploring opportunities in Austria, Germany and Switzerland. These are countries where Macquarie has an established presence and where we think we can get good engagement with clients in addition to importing our smart metering expertise from our experience in the UK.

 

00:07:20

Alice Farr: And have you noticed any changes in the business since SAF joined Commodities and Global Markets in September?

 

00:07:25

Julian Liddy: Yeah, so our business moved into the Commodities and Global Markets group within Macquarie back in September last year, as you say, and being part of a larger group has been a really exciting experience for all of us. In particular, we've had the opportunity to work more closely with a number of teams who have a similar client base to ourselves. This has enabled us to be better joined up in terms of what we can offer our clients.

So for example, in the mobility space, we're doing some really exciting work with a couple of fleet businesses which will enable them to mitigate their carbon footprint from their traditional internal combustion fleet via our carbon trading desk, as well as transition to an electric fleet via our electric vehicle funding programmes.

 

00:08:09

Alice Farr: You've worked at Macquarie during previous downturns. What challenges has the business faced and what opportunities have you been looking for?

 

00:08:15

Julian Liddy: This crisis is quite different, it's essentially a voluntary shutdown or hibernation of a large swathe of the economy driven by a health crisis. The big unknown, of course, is what the emergence from the shutdown is going to look like. Our businesses have been pretty robust. We have a strong risk culture and spend a lot of time thinking about what could happen in various worst-case scenarios.

We also learnt a lot from 2008, so we have entered this crisis well prepared from a liquidity and funding perspective. We're focused on ensuring that we work closely with clients in responding to their needs. We've actually been able to have much more in-depth conversations with our clients, enabling us to develop solutions quickly and ensure those are rapidly deployed.

 

00:08:58

Alice Farr: Thanks, Julian. It's really interesting to hear how this crisis compares to the previous one. And then, when we emerge from this crisis, what do you see as the key drivers of growth for the economy and for Macquarie?

 

00:09:07

Julian Liddy: One of the key features of this crisis has been the degree of government intervention. This is something we have followed very closely and reflected on carefully in the context of our clients' businesses. Our focus will continue to be on solving problems and challenges for our clients in those sectors in which we have expertise but I suspect that the increased pace of disruption and government intervention in certain sectors may provide both ourselves and our clients with some really interesting opportunities.

For example, the impact of the lockdown in London has significantly reduced the amount of air pollution. This, combined with a better understanding of the impacts of pollution on the respiratory system, may in time lead to an acceleration of regulation regarding zero-emissions vehicles in city centres around the world. This would not only stimulate economic activity by encouraging production of those vehicles but would also present a really interesting opportunity for ourselves and our clients to help get this technology deployed and operational.

 

00:10:03

Alice Farr: And how have you found working from home for such a long period and do you think the pandemic will change attitudes towards flexible working?

 

00:10:09

Julian Liddy: Yeah, to be honest, I've found working from home a bit of a mixed bag. While I've really enjoyed being closer to my family and have benefitted from saving travel time to and from the office, I've really missed the social interaction with colleagues and the ability to rapidly share ideas.

The big game changer for me however, has been the technology. Our tech team have just done an amazing job of ensuring that we can spend many hours each day interacting with each other. I think we've all been surprised at how effectively you can work from home but I think we're looking forward to getting back to the office even if it's just for a day or two per week. Now I know it's not the same for everyone at the moment, not least key workers on the front line, so I'm very grateful that we have the ability to work in this way.

 

00:10:50

Alice Farr: So clearly there are some really interesting things going on with smart metering, electric vehicles and solar projects to name a few. So just before we finish, how would you sum up the next 12 months for SAF?

 

00:10:59

Julian Liddy: Yeah, I'm really optimistic about the next 12 months. We have a fantastic pipeline of opportunities across all of our businesses, we have a really smart and highly engaged team and most importantly, we're working hand-in-hand with our clients through some of these global megatrends taking place in energy, transportation and telecommunications around the world.

 

00:11:20

Alice Farr: And finally, for Graduates and Interns who might be listening, what's your top tip and why should they choose Macquarie?

 

00:11:25

Julian Liddy: Well, my top tip is to choose a job or organisation which does stuff that you are really interested in or passionate about. I'd choose Macquarie because it's different from a lot of other organisations. We're a bottom-up, entrepreneurial place where our teams and people are given a lot of freedom to pursue opportunities in sectors and geographies which are of interest to them.

I found this approach really stimulating which is why I suppose I've hung around for such a long time. It's not for everyone of course but it does appeal to those with an entrepreneurial bend who want the support and infrastructure that a large organisation like Macquarie can bring.

And now what about you, Alice? You started your journey at Macquarie as an Intern and returned as a Graduate. Can you share a project you've worked on that you found particularly interesting?

 

00:12:10

Alice Farr: Yeah, sure. So I've been fortunate to work on several interesting projects and one in particular is a plastics recycling plant that we've been looking to fund.

So there's been significant focus commercially and from the government on moving towards cleaner sources of plastic so it's been really interesting to work on a project that's both leveraging these opportunities and helping businesses make a positive transition towards cleaner production.

 

00:12:31

Julian Liddy: Very interesting and what does a regular day in the office look like for you, Alice?

 

00:12:35

Alice Farr: So there's a lot of variety in my day-to-day activities which means that the day can look like anything. So I get to work on some large-scale projects and with people at all levels of seniority and a lot of my day will involve working on Excel models and preparing for presentations for deals that I'm working on and this will be together with my regular reporting responsibilities.

I also have meetings throughout the day which will include team catch-ups, progress check-ins on work and also more formal meetings to discuss projects and deals.

 

00:13:00

Julian Liddy: And finally, Alice, why did you choose Macquarie and what advice do you wish someone had given you?

 

00:13:06

Alice Farr: So I chose Macquarie because of its expertise in energy and infrastructure. So with businesses transitioning towards more sustainable sources of energy, I was really excited by the prospect of working for a company that has a focus on maximising these opportunities.

And for the advice I wish someone had given me, I'd say, if you can think of a better way of doing something, don't be scared to suggest it. As you mentioned, Julian, Macquarie's a bottom-up based organisation, so this lends itself to allowing junior people to speak up and have their ideas heard.

 

00:13:30

Julian Liddy: Thank you, Alice. That's really interesting and I'm glad you're enjoying your time at Macquarie.

 

00:13:36

Alice Farr: Julian, thank you for that fascinating insight into your career and Specialised and Asset Finance. For those listening, thank you for joining today's podcast. I hope it's provided some inspiration as you consider your own careers. We look forward to welcoming you to the next episode in the podcast series.

 

00:13:51

Voiceover: Thank you for listening to the Macquarie Podcast Series.

 

Audio file available for download below.