Overseas companies are likely to step up their acquisitions of local financial services firms in the wake of the recent purchases of Tower Australia Group and Tyndall Investments by Japanese conglomerates, according to investment commentators.
SG Hiscock & Company portfolio manager Robert Hook said that notwithstanding the strong local dollar, foreign buyers were clearly prepared to take a very long-term view of Australian assets.
“Tower has always been a good company – you know it has probably been under-realised by the Australian investors,” Hook said.
“I think it’s a good deal and we will probably see more interest in the financial sector.
“We saw the Perpetual deal fall through. So there is a move by the large groups globally to consolidate their sector globally and also Australia still remains very attractive because of the very high investment in superannuation.”
He said he would not be surprised to see more overseas purchases of Australian groups in the next few years.
Lincoln Indicators equities analyst Michael Feller said that as long as Australia had a well-managed economy, it would continue to lure overseas buyers.
“For as long as Australia is seen as a mature and safe economy that’s nonetheless exposed to emerging market growth via our trade relationship with China, it’ll be attractive to foreign companies no matter what the industry,” Feller said.
The spike of interest in Australian financial services firms began in November last year, when Nikko Asset Management agreed to pay as much as $128.5 million for Suncorp’s funds management division, Tyndall.
The Japanese group had been seeking an entry into the Australian market for some time and the acquisition of the $25 billion fund manager was a statement of commitment to the market, Tyndall managing director Craig Hobart said after the deal was announced.
