Trying to hear what's not being said
March 13, 2025 Leave a comment
#AUDEUR The Aussie Dollar is approaching its 8th moment over the past 25 years when it’s trading at extreme lows (across my various metrics) against the Euro.
And so Australian assets are also on sale in EUR terms.
Expect to see European private equity firms scouring through ASX listed securities.
March 13, 2025
rob@karriasset.com.au
July 3, 2024 Leave a comment
Inserting the word ‘Private’ into a term or phrase doesn’t make it cheap.
The marketing seems to suggest that it’s better and perhaps exclusive to gain entry.
‘Private Club’, Private Equity’, ‘Private Room’, ‘Private Jet’, ‘Private School’, ‘Private Lounge’, ‘Private Credit’, Private Banker’ etc etc etc
But the word ‘private’ comes at a cost, it’s never a bargain.
The fees and what the provider/promoter can earn from you seem to precede the concern over the quality and level of the service being rendered….
Anything ‘private’ always starts as being expensive and remains so, the whole time…..
In the case of investment markets and funds, ‘private’ can also prove difficult to exit and likely expensive too.
The last 4 lines in the Eagles song, “Hotel California” come to mind.
Last thing I remember, I was running for the door
I had to find the passage back to the place I was before
“Relax, ” said the night man, “We are programmed to receive
You can check out any time you like, but you can never leave”
#public
July 3, 2024
by Rob Zdravevski
rob@karriasset.com.au
April 16, 2024 Leave a comment
It all started when Fortress Investment Group went public on February 9, 2007, and the IPO was priced at $18.50 per share.
Next, Blackstone went public in June 2007 when its IPO was priced at $31.
KKR priced its IPO at $10 in July 2010.
At the time of KKR going public, shares in Blackstone Group (BX) and Fortress Investment Group (FIG) had fallen by 71% and 87% respectively since their market debuts in 2007.
Apollo Global Management was next to list their shares, when on March 30, 2011 their IPO was priced at $19
The Carlyle Group went public on May 3, 2012, and the IPO was priced at $22 per unit.
More recently, TPG went public on January 13, 2022, and the IPO was priced at $29.50 per share.
Everyone’s charts are below except for Fortress (FIG) because in Q1 of 2017, Softbank acquired them for $8.08 per share.
Today, CVC announced their interest in going public.
Over a 10-15 year timeframe, it’s not clear cut whether there is merit backing the ‘sponsor’ in every case.
April 15, 2024
by Rob Zdravevski
rob@karriasset.com.au
April 12, 2024 Leave a comment
The quote below doesn’t signify a peak of equity markets yet but it is a preamble.
A crescendo in IPO activity is required for private equity funds when selling/offering their investments to the thirsty public.
“In 2023, private equity groups saw their stockpile of unsold investments surpass a record $3tn. Consultancy Bain & Co has warned of a “towering backlog” of companies that must be sold so cash can be returned to investors……..”
https://www.ft.com/content/e1c1bfc0-ed89-47ac-be6f-f5775e9a6f4d
April 12, 2024
April 3, 2024 Leave a comment
Private Equity is about to become a forced buyer.
Private Equity Buyout Funds need to use its cash hoard (26% of the $1.2 trillion held is considered aged) or perhaps lose it.
You don’t earn any fees if you hand money back to investors.
But seldom do forced buyers find bargains.
And then let’s add some leverage (interest rates are 4 times higher than 2 years ago)……..then achieving an adequate return from ‘Private Equity’ may be stressed and ambitious, at the very least.
April 3, 2024
by Rob Zdravevski
Karri Asset Advisors
rob@karriasset.com.au
December 13, 2023 Leave a comment
Diversified mining company, Anglo American plc announces that it will reduce production in order to cut costs and boost profitability.
https://www.ft.com/content/9e794642-f7f3-497a-ac02-e02b63cb96aa
OK, that seems logical and prudent….
In fact, why dig up the stuff if you are losing money on it or your costs are rising and crimping your margins?
but due to this news, the stock price fell 19% last Friday and 6% more in the following 2 days of trade.
Obviously, this would not happen if it was a privately held company.
And so, I think we’ll see a growing trend of listed companies becoming owned by private equity, sovereign and pension funds.
Benefits of such a trend would include allowing executives to move away from ‘short-termism’ and thus freeing up time that they currently spend appeasing public shareholders.
But the best part is not being forced to produce and grow at any expense, pressured by shareholder expectations and you also have most (if not all) of your funding and borrowing covered.
December 13, 2023
by Rob Zdravevski
rob@karriasset.com.au
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