Blackstone Sees Australian Firms Warming to Private Equity

Australian corporate boards are becoming more receptive to engaging with buyout firms than they have been at any time in the prior decade, according to Blackstone’s head of private equity in the region.

Public company boards’ “views on private equity are beginning to change,” overturning a long history Down Under of skepticism of the industry, Michael Blickstead, head of Australia & New Zealand private equity for Blackstone said in an interview.

The shift may have been influenced by activism from shareholders or the region’s large pension funds, Blickstead said. “For whatever reason, they now see engagement as part of their fiduciary duty and that private equity offers a real option for maximizing value,” he added.

Buyout firms led two of Australia’s largest takeover campaigns this year, though both were unsuccessful — notably a $13.1 billion offer for hospitals operator Ramsay Health Care Ltd. by KKR & Co. and an approach for $11.3 billion pallets pooling business Brambles Ltd. by CVC Capital Partners. Recent months have also seen a rising trend of unsolicited approaches from private equity firms in the form of share raids.

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The change would make for happy hunting for the world’s largest private equity firms including Blackstone, which has notched high-profile deals this year including buying Crown Resorts Ltd. for $6.4 billion.

“The Crown deal helped in terms of demonstrating our conviction that Blackstone as a firm will carry through,” Blickstead said. “We always do months of due diligence before we approach a board and that helps them take us seriously when we do make an approach.”

Blackstone as a principle seeks friendly deals and is looking to deploy capital from its second Asia Pacific Fund totaling $11 billion, Blickstead said. The firm realized $1 billion in net profit in the region from the sales of non-bank lender La Trobe Financial and New Zealand insurer Partners Life in 2022, he said.

Source: BNN Bloomberg

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