Macquarie Group (ASX:MQG) can turn to private credit to close its growth gap, but capital constraints limit the company's option for a major acquisition, Jefferies said in a note on Thursday.
The company is heavily focused on real assets, which has left it underexposed to faster-growing segments such as private credit, and lagging many of its diversified peers.
The investment firm sees private credit as a key growth lever, providing more "stable, scalable and capital efficient earnings" with less dependency on market cycles.
It expects the company to take on a build-led strategy to increase its private credit exposure, potentially using partnerships instead of a large acquisition.
"We expect a more phased approach than recent commentary implies, with execution likely to lag expectations and outcomes to take longer to emerge," analysts at the firm commented.
Jefferies maintained a buy rating and price target of AU$253.73.