Exploring the major PE players targeting Australia

With numerous private equity firms taking an interest in Australia, Money Management explores their backgrounds and who are the big leading players. 

There have been several deals and bids enacted in recent months as overseas firms are predicted to take a greater interest in the Australian market. 

This includes Oaktree Capital investing $240 million in professional services firm AZ NGA, KKR entering a scheme of arrangement with Perpetual to acquire its corporate trust and wealth management business, as well as Bain Capital and CC Capital both making bids for Insignia Financial.

Legal experts at Herbert Smith Freehills recently flagged the financial services sector as one of the standout areas for M&A in the new year, driven by “hungry corporates and the ubiquitous mountains of private equity”.

Below, Money Management examines the major players who have exhibited an interest in Australia so far.

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KKR

In 1976, Kohlberg Kravis Roberts & Co (KKR) was co-founded by Henry Kravis, George Roberts, and Jerome Kohlberg as a US-focused private equity firm. Headquartered in New York, it expanded into Europe in 1996 and Asia in 2005 before opening its first Australian office in 2007.

KKR has more than US$190 billion ($305 billion) in private equity assets under management (AUM), as of 30 September 2024.

The firm’s involvement with Sydney-based Perpetual was first confirmed last May when it announced it would sell its corporate trust and wealth management business to KKR following a strategic review, leaving behind the asset management division. 

It entered into a scheme of arrangement where KKR would buy the businesses for $2.1 billion. However, concerns were raised about the deal at the time of Perpetual’s full-year results in September as analysts questioned the tax liability and if the firm had contingency plans in place if the deal collapsed.

More recently, an independent expert ruled that the transaction was no longer in the best interests of shareholders in light of the increased tax liabilities. 

“Perpetual and KKR are continuing to engage constructively in relation to the transaction,” it said.

The potential deal followed after when in 2021, Commonwealth Bank sold its 55 per cent stake in Colonial First State (CFS) to KKR.

Oaktree Capital Management

The US-based global asset management giant was set up in 1995 by co-founders Howard Marks and Bruce Karsh and has US$205 billion in assets under management. Based in Los Angeles, it opened an Australian office in 2016, which is led by managing director, Byron Beath.

Oaktree was first rumoured to be in talks with Australian financial advisory and accounting group AZ NGA in mid-2024, with a confirmed strategic partnership announced last September. 

The asset manager has now completed its $240 million investment in the company, making it AZ NGA’s largest shareholder, while Azimut management and business owners have retained a “strategic stake” in the company.

With Oaktree already owning several stakes in the global financial services landscape, such as UK financial advice company, Ascot Lloyd, its partnership with AZ NGA strengthened its presence in the Australian market.

AZ NGA CEO Paul Barrett told Money Management at the time: “We now have one of the most respected investors on the planet – it’s an absolute privilege for us to have Oaktree. It means that we now have significant financial horsepower and significant know-how to go about the rest of our work.”

Commenting on both Oaktree and KKR’s activity in the Australian market, M&A experts said these deals will be “only the start” for overseas players looking to enter the Australian market.

Bain Capital

Household name Insignia Financial has also been at the centre of a bidding war as two US players look to acquire the Australian financial services firm.

On 13 December 2024, it was announced that US private equity giant Bain Capital had made a preliminary offering for Insignia, offering $4 per share, which was a 30 per cent uplift on Insignia’s share price at the time and valued the company at $2.7 billion.

Bain Capital is a US private investment firm specialising in private equity and venture capital, with US$185 billion in AUM and offices in Melbourne and Sydney. It was founded in 1984 by Bain & Company partners, Mitt Romney, who is a former US presidential candidate; Coleman Andrews; and Eric Kriss.

Although Insignia confirmed several days later that it had rejected Bain’s offer, as the transaction did not “adequately represent fair value for shareholders”, commentators predicted that it could “open the floodgates” for US firms looking at Australia.

Financial services M&A expert, Tony Beaven, said it is likely Bain Capital will return with a better offer in order to successfully secure the deal.

CC Capital 

Less than one week into 2025, Insignia received a second takeover bid to acquire 100 per cent of the company – this time from New York-based firm CC Capital Partners. 

This would be to acquire all of the shares in Insignia Financial by way of a scheme of arrangement at a price of $4.30 cash per share. The $4.30 offer is 7.5 per cent higher than the $4.00 per share originally offered by Bain Capital. 

Insignia said it is “considering the proposal” to assess if it is in the best interest of shareholders and that there is no certainty that it will result in a transaction proceeding.

CC Capital was founded in 2015 by Chinh Chu, the former co-head of private equity at alternative asset manager, Blackstone. If the deal were to go ahead, it would be the firm’s first major investment in the Australian market.

The firm has a previous link with Insignia, having put in a bid to acquire MLC Wealth in 2021, which went on to be acquired by Insignia. 

Earlier this week, Morningstar equity analyst, Shaun Ler, said the two bids demonstrate Insignia is undervalued, particularly in light of future plans announced at the firm’s Investor Strategy Day last year.

He said: “The proposal vindicates our view that Insignia was undervalued, and that its earnings outlook is brighter versus its 2023–24 levels. The firm is recovering from past headwinds that hurt its ability to attract and retain client assets and improve profitability.”