Home Commodities Former Macquarie star trader agrees to terms to join Swiss house Mercuria

Former Macquarie star trader agrees to terms to join Swiss house Mercuria

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Macquarie's former star commodities trader Nick O'Kane has agreed terms to join Mercuria as the Swiss trading house looks to expand its gas and power business, according to people with knowledge of the discussions.

Under the preliminary agreement, O'Kane would initially be based in Dubai, the people said. The fifty-year-old Australian will take on a senior leadership role to grow Mercuria's gas and power activities, particularly in Asia, one of the people added. The appointment has not yet been finalized, the person warned.

O'Kane, who resigned from Macquarie last month after nearly three decades, was the group's highest-paid executive in 2023, earning A$58 million ($38 million), or 75 percent more than the chief executive. Shemara Wikramanayake. His salary also surpassed that of JPMorgan Chairman Jamie Dimon and Goldman Sachs Chairman David Solomon.

Commodities traders anticipate huge increases in demand and volatility in gas and electricity markets as the global energy system shifts away from more polluting oil and coal. Mercuria's rivals, including Trafigura, Vitol and Gunvor, have also been expanding their gas and power equipment.

Mercuria and O'Kane declined to comment.

While at Macquarie, O'Kane built the Australian bank into a powerhouse in energy trading. Last year, the commodities and global markets business he helped build and run accounted for almost 60 percent of Macquarie's profits. The merchant had been tipped as a possible successor to Wikramanayake.

Privately held Mercuria has not outlined a succession plan for CEO and co-founder Marco Dunand, who will turn 63 this year. A person close to Dunand said he had no immediate plans to resign.

Mercuria, founded by Dunand and former Goldman Sachs trader Daniel Jaeggi in 2004, has hired high-level bankers before. In 2014, the company hired Magid Shenouda, former co-head of commodities at Goldman Sachs. Shenouda was previously flagged as a possible successor to Dunand and Jaeggi.

In 2021, Frederic Barnaud, former head of Singapore's Pavilion Energy, joined Mercuria as chief commercial and strategy officer, but left less than a year later.

Unlike Trafigura, Vitol and Gunvor, which remain more focused on physical oil trading, Mercuria has also ventured into financing, offering services more similar to those offered by investment banks. In 2014 it bought part of JPMorgan's physical commodities trading business to strengthen its operations, particularly in the US energy markets.

The company posted net income of $3 billion in 2022 on revenue of $174 billion, up from $1.25 billion in 2021, as volatility in commodity markets boosted traders' profits.

Oil trading accounts for around 30 percent of total revenue, but along with gas and power trading, the group is also investing in green technologies such as battery storage and biogas. Dunand has said that half of the company's investments each year will go toward energy transition projects.

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