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By Antony Currie

MELBOURNE, April 22 (Reuters Breakingviews) - So much for sacred cows. Often, companies are tempted to hold on to an underperforming operation because the boss was instrumental in either creating it or building it. Such sentimentality has little place at Macquarie MQG.AX. Boss Shemara Wikramanayake helped start and later expand the Australian financial powerhouse's money management business. In a refreshingly dispassionate move, she's now selling the part managing some $180 billion of the U.S. and European public assets to Nomura 8604.T for $1.8 billion.

Wikramanayake was global head of what would later become Macquarie Asset Management $(MAM.AU)$ when the group agreed in 2009 to buy the U.S.-based Delaware Investments' $125 billion of assets in 2010. A decade later, two years after becoming overall boss, she oversaw the $1.4 billion acquisition of $68 billion in assets managed by another American outfit, Waddell & Reed.

Add in Tuesday's announcement and her three fund management deals highlight the changing fortunes of the broader industry. The first purchase, coming on the heels of the global financial crisis, was a relative steal, with Macquarie paying what equated to just 0.34% of the target's assets. That jumped to 2% for the W&R transaction, though that followed a recovery in valuation multiples for active managers in the early part of the decade before the rise of passive investing whacked them again.

The trend of declining multiples has continued. Growth is elusive. Meanwhile, fee pressures and costs mean the margin for the cast-off businesses is less than 15%, using earnings estimates from MST Marquee research, compared with the overall most recent six-month showing of 35% for Macquarie Asset Management.

As a result, Nomura is paying a not-too-bad multiple of just 1% of assets. The acquisition will help the Japanese firm further diversify its overseas earnings and give its Japanese investing clients more in-house options. Its new unit's net margin is also higher than what Nomura currently earns. The acquirer's main risk is that the "sell America" trade induced by U.S. President Donald Trump's actions accelerates.

For her part, Wikramanayake will have taken the firm she leads back to its roots. Most of Macquarie Asset Management's remaining $400 billion in assets is focused on infrastructure, real estate, private equity and private credit. Sure, they're not immune to bad policy, either. But the juicier fees are far more durable.

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CONTEXT NEWS

Nomura has agreed to buy Macquarie's $180 billion public asset management business in the U.S. and Europe for $1.8 billion, the two companies said on April 22.

(Editing by Una Galani and Aditya Srivastav)

((For previous columns by the author, Reuters customers can click on CURRIE/antony.currie@thomsonreuters.com))