The man behind the next Macquarie

The Adelaide-born investment banker, who officially retired in 2020, is often credited as a pioneer of Australia’s listed real estate industry. And before he retired (for the second time – his first attempt in the early 2000s didn’t stick) Andrew Pridham co-headed a company known by many as a mini version of Macquarie Bank.

Moelis Australia – which in 2021 became MA Financial Group (ASX: MAF) – was co-founded by Pridham and US billionaire investment banker, Ken Moelis, in 2009. As Pridham tells it, he told Moelis the only way he would be involved is through a 50-50 equity partnership.

“Why don’t we put in $5 million each, if that’s not enough, we’ll agree to put in another $5 million if we have to – that’s it,” Pridham explains to Centennial Asset Management’s Matthew Kidman in a recent edition of the Success and More Interesting Stuff podcast.

Without hesitation, Moelis accepted, and the pair were in business. From that initial $10 million, the company has grown into an ASX-listed firm that today has a market cap of $884 million.

Pridham believes the simplicity of the initial arrangement, and the fact both partners started on an equal footing, go a long way to explaining the venture’s success.

And something like the “back of the envelope” sketch that seems to underpin many successful companies, Pridham sums up their initial business plan in this way: “‘Let’s get some money and some good people and do stuff,’ and that’s what we did.”

“Ken and I have never had a disagreement. And it worked well because there was total alignment.”

The golden era of real estate

During the interview, Pridham reflects on how he came to be part of this defining period for Australian property in the mid-1990s.

“There was this great securitisation of real estate in Australia, where the REIT industry as it’s now called really blossomed,” says Pridham.

“You saw a great transfer of RE from within the life companies, a transition of the assets from them into private hands and even into public markets.”

Pridham comes from what he describes as a normal middle-class family in Adelaide. His father worked in a management role with a chemicals company and his parents owned a few investment property apartments that they leased out. Pridham recalls mowing the lawns from an early age, which then progressed to helping interview prospective tenants during his later teenage years.

After completing school, he considered studying law but opted for a Bachelor of Applied Science majoring in property resource management at the University of South Australia.

Pridham says this was a cutting-edge real estate course teaching concepts that hadn’t been widely applied to the sector previously – such as regression analysis, discounted cash flows, and initial rates of return.

“Things that now seem pedestrian but were challenging then. You had to learn to do things very technically. At the time, these things weren’t done in real estate, which was then a much more basic, gut-feel approach,” Pridham says.

After completing his studies – in his final year he worked part-time for the company now known as Jones Lang LaSalle – he moved to Sydney for work in 1989.

“I played my last few games of amateur AFL – that was a hard thing to leave behind – along with moving away from family and friends. But I always thought Sydney, for my career, was where I should be,” Pridham says.

Once on Australia’s east coast, his first role was with an asset development company called CapCount, which ran a property trust that later became part of Goodman Group (ASX: GMG). And from here, seeking more variety, he joined Wardley James Capel – where he worked in loan analysis and assisted in the project financing of property deals.

Bond and Skase hit the skids

By now, in the early 1990s, he says the industry was “starting to fray pretty quickly.” He recalls seeing the likes of Alan Bond and Christopher Skase turn up in meetings.

“Much of what I was involved in was trying to unwind things that were, at this stage, not going well,” Pridham says.

“I was looking at these assets and they’d typically be coming in either wanting to refinance them or to sell them.”

Looking back, Pridham realises he was watching Australian corporate history unfold, “but at the time it was all I knew, that’s just what business was about.”

From here, Pridham moved into securitised property trusts and through the ranks at SBC and Warburg Dillon Read. He also worked on the real estate team for investment bank Dominguez Barry Samuel Montagu, in a role that was made particularly challenging once the 1991 recession hit.

“I was trying to eke out a living and do deals when the recession hit in 1991. That was very difficult because property was in such a perilous state,” Pridham says.

One of his notable deals during this time involved a shopping centre purchase for GPT, which was particularly challenging because of the absence of liquidity in the market at this time and the inability to raise equity through the usual channels.

“We created a $120 million debenture, with options, which was at that time a very complex structure,” recalls Pridham.

Pridham’s career goes global

Soon after this, his career hit the international stage after another firm he worked for was acquired by the Swiss investment bank UBS. Though Pridham was initially reluctant to move offshore, the offer was too good to refuse. And based in London, he went on to become a UBS head of investment banking at the age of 28.

“We were number one in debt capital markets M&A, so we were very strong. Though we got paid well, it was hard work and long hours. And once we became market leader, it became a bit of a chore for me,” Pridham says.

At this point he realised he liked building businesses more than managing them “and managing a bunch of investment bankers, I can tell you, is not fun. They’re always complaining, they always want more, and are always hard done by,” Pridham recalls.

“Increasingly, I was becoming an administrator, and I just don’t enjoy doing that. So, I was ultimately keen to come back to Australia,” he says.

He returned to Sydney in 2002. During this period of retirement – which lasted all of six months at the age of 35 – he worked in his children’s school tuck shop.

He also joined the board of the Sydney Swans, partly through his connection to Richard Colless – a former client who was the founder of Pacific Mutual (which went on to become Mercantile Mutual before becoming part of ING).

As old clients kept in touch, including Westfield contacts – Pridham counts Frank Lowy and his sons as friends – Pridham was coaxed back into the corporate world. He launched Grange First Provident with former UBS colleagues, Chris Wyke and Julian Biggins.

Building and running the successful business as a two- or three-man boutique, as the senior investment banker, Pridham says he was working on multiple deals simultaneously, “and it wasn’t sustainable.”

So, when an acquisition approach was made by US investment banking behemoth J.P. Morgan, he accepted. The decision to sell was taken because of the huge extra international scale it provided and also out of an obligation to Wyke and Biggins.

“As a boutique, we didn’t have the toolkit or global reach to provide the services offshore – particularly in equity capital markets,” Pridham says.

And from here we return to the period mentioned at the top of the article, with Ken Moelis approaching Pridham to form a business venture that went on to become MA Financial Group. Though he retains a large stake in the business and is MA Financial Group’s vice chairman, Pridham retired in 2020, a few years after its IPO in 2017. He also retains his role as chairman of the Sydney Swans, a position he’s held since 2013.