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(Bloomberg) — When Nick O’Kane, one of the world’s highest-paid bankers, unexpectedly quit Macquarie Group Ltd. this month, the Australian financial giant moved quickly to temper expectations for his successor.

Simon Wright takes over the commodities and markets business that accounts for nearly half the profit at the Sydney-based firm. While the unit is expanding its customer base and revenue, the key driver that propelled it to a blockbuster result just a year ago is waning after market volatility eased.

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“Macquarie definitely has higher sensitivity to the macro factors out there,” said Junvum Kim, a senior sales trader at Saxo Capital Markets in Singapore. “They are more exposed to the macro environment, which has recently shown a number of potential risks and we’ve seen low volatility.”

Macquarie’s trading revenue is seeing a dip in North America gas, power and emissions. Chief Executive Officer Shemara Wikramanayake has guided investor expectations in recent months, saying the unit’s commodities income is running in line with the 2022 financial year despite lower volatility. That’s down from the 2023 blowout result, when ructions in energy markets and the Ukraine-Russia war saw huge spikes in market swings. 

“We’re not having any of that heightened volatility, but we’re still tracking at the same income levels because the franchise has just grown – the client base is growing, the sectors we’re in have grown, so the underlying revenues have grown,” she told analysts on a Feb. 13 call. 

Read more: Macquarie Profit ‘Substantially’ Down; Commodities Head Resigns

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Wright is a 35-year veteran of Macquarie, the famously secretive stalwart of Australia’s finance industry with businesses that span asset management, investment banking and lending for the green-energy transition. Within that lies the CGM unit, which in the first half of the 2024 fiscal year contributed 49% of the entire firm’s profit. 

“They’ve always promoted top performers so I have no doubt that this will continue,” said Jamie Hannah, Sydney-based deputy head of investments and capital markets at Van Eck, which holds Macquarie shares. “In the medium term, Macquarie should continue to be successful.”

Wright replaces O’Kane, who was also promoted from within CGM to run the business in 2019. Kane made headlines last year when he was awarded almost A$58 million ($38 million) in compensation, not only topping Wikramanayake’s pay, but also that of JPMorgan Chase & Co.’s Jamie Dimon. Kane had taken over the role when Andrew Downe resigned after a 37-year career with Macquarie. 

Simon “has been here since the early days of Andrew Downe when we had two men and a labrador in that business, and will oversee the transition to the next phase,” Wikramanayake said when announcing his appointment.

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A Macquarie spokesperson and Wright declined to comment further. 

Wright has spent three decades in the fixed income and commodities business, where he’s run products from currencies to interest rates and structured credit. 

His promotion coincides with a rally in Macquarie shares. The stock jumped to a one-year high last week, and has doubled the return of the MSCI World Banks Index over the past five years amid sales of assets in the green energy sector and a flurry of investment-banking deals. 

Wikramanayake has signaled part of the future for CGM is building on its strong North American presence in other parts of the world, notably in Europe, the Middle East and Africa. She also has teams expanding in Asia, which she characterized as “a market for us to grow into.”

That strategy lies in the hands of Dan Vizel, who’s headed CGM Asia for about 18 months, following 15 years in the US energy business in Houston and New York. CGM Asia oversees around 400 staff in 14 locations.

“Our North American business is very established and touches a lot of different points, which allows us to provide a really good service to our clients,” Vizel said last week on a call with analysts. “We’re hoping to replicate that as much as possible.”

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