Australian companies are warming to private equity, says Blackstone

Australian company boards are becoming more receptive to engaging with buyout firms than they have been at any time in the past 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 in Australia of scepticism of the industry, Michael Blickstead, head of Australia & New Zealand private equity for Blackstone said in an interview.

Private equity firms such as Blackstone led some of the country’s largest takeover campaigns in 2022.Credit:AP

The shift may have been influenced by activism from shareholders or the region’s large superannuation 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 maximising value,” he added.

Buyout firms led two of the country’s largest takeover campaigns this year, though both were unsuccessful — notably a $20 billion-plus offer for hospitals operator Ramsay Health Care by KKR, and a $20 billion bid for pallets pooling business Brambles 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.

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 for $8.9 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 $US11 billion, Blickstead said. The firm realised $US1 billion ($1.5 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.


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