MELBOURNE (Reuters) – Private equity firm Blackstone Group LP (BX.N) said on Wednesday it was setting up a presence in Australia to target attractive opportunities, joining other LBO firms in an island of solid economic prospects.
“We are establishing a presence here to integrate the firm into the local business community, seeking opportunities to invest and to raise capital,” Philip Levinson, managing director of Blackstone Group Australia, told a conference call.
Other large private equity firms including Carlyle Group CYL.UL are already active in Australia’s $20 billion private equity sector.
Last week Carlyle and TPG [TPG.UL] were the two bidders that made a $1.6 billion offer for Australian hospital operator Healthscope (HSP.AX), a source told Reuters, marking the largest private equity deal in Australia since 2007.
Market sources said Blackstone had been poised to open up an office in Sydney late last year, but delayed its plans awaiting developments on the Australian tax office’s taxing of private equity deals.
Levinson was not available to give more details on the firm’s plans in Australia.
Byron Wien, vice chairman of Blackstone Advisory Partners, told the same media call he does not expect a mass exodus of investors from Australia’s mining sector if a proposed 40 percent tax on the sector is introduced.
But Wien, formerly the famously bearish chief investment strategist at Morgan Stanley, and most recently at hedge fund Pequot Capital Management, warned that targets of the tax would seek other alternatives.
“The government has to be very careful about this, because studies show that when you raise taxes too much you don’t really get any more revenue,” Wien said. (Reporting by Victoria Thieberger; editing by Ed Davies)