Is this the end of an era? Allan Moss bows out as chief executive of Macquarie Group, while his successor, Nicholas Moore, warns of a possible reversal in the Australian bank’s 16-year run of profit growth. Beating profits for the fiscal year ended in March will be “challenging”, said Mr Moore. Analysts expect this year’s net profit to fall fractionally below last year’s A$1.8bn. This is chilling stuff for an investment banking group that had, so far, appeared relatively immune. Operating profit in the last fiscal year, much of which coincided with the credit crisis, rose 15 per cent year-on-year to A$8.2bn. The basic Macquarie concept of buying infrastructure assets and packaging them into funds, skimming off investment banking fees along the way, seemed more or less intact. But cracks had begun to appear. As credit markets retreated, group funding rates rose by about 100 basis points for longer term funding. The bank was forced to make writedowns in its real estate investments and wind down its mortgage business. The damage was evident in the second-half results: operating profits tumbled 26 per cent compared with the first half.

Competition for infrastructure assets remains high: Macquarie this week lost out on a US toll road to a group that blew the Australian bank’s US$8.1bn bid out of the water. Bundling these assets into funds is less lucrative than it was. Fund raising tapered off through the course of the year and fees, too, are coming off. Management fees were 22 per cent higher on a year-on-year basis, but flat in the past six months. More worryingly, only one of the 20 listed funds earned any performance fees at all in the latest six months. All this would appear to corroborate what investors have long suspected: that Macquarie is ex-growth. The self-styled millionaires’ factory has been steadily de-rated during the past three years and is a favourite among the shorting community.Tuesday’s downbeat prognosis offers little reason to disagree.