Blackstone’s private equity head says boardrooms turning positive for industry

According to Blackstone Inc.'s head of private equity in the region, Australian corporate boards are more receptive to engaging with buyout firms than they have been in the past decade.

In an interview, Michael Blickstead, head of Australia New Zealand private equity for Blackstone said that public company boards views on private equity are beginning to change, overturning a long history Down Under of skepticism of the industry.

The shift could have been influenced by activism from shareholders or the region's large pension funds, according to Blickstead. He added that private equity is a real option for maximizing value and that they now see engagement as part of their fiduciary duty.

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. Private equity firms have been taking advantage of share raids in recent months because of a rising trend of unolicited approaches 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 Ltd. for $6.4 billion.

Blickstead said that the Crown deal showed that we have a conviction that Blackstone will carry through. We always do a lot of due diligence before we approach a board, and that helps them take us seriously when we do make an approach. Blackstone is looking to deploy capital from its second Asia Pacific Fund to its second Asia Pacific Fund, totaling $11 billion, Blickstead said. He said that the firm realized $1 billion in net profit from the sales of non-bank lender La Trobe Financial and New Zealand insurer Partners Life in 2022.