{"id":226,"date":"2007-03-03T15:43:56","date_gmt":"2007-03-03T15:43:56","guid":{"rendered":"http:\/\/chriscurnow.com\/index.php\/2007\/03\/03\/private_equity\/"},"modified":"2007-03-03T15:43:56","modified_gmt":"2007-03-03T15:43:56","slug":"private_equity","status":"publish","type":"post","link":"https:\/\/chriscurnow.com\/?p=226","title":{"rendered":"Private Equity"},"content":{"rendered":"

Unless you’ve been asleep, hibernating, or out of the country for
\nthe last 12 months, you will be well aware that the Private Equity<\/a>
\nphenomenon has well and truly hit Australia. <\/p>\n

I can’t remember when it actually hit my radar, but the KKR bid
\nfor Coles<\/a> [Updated 20\/4\/07] <\/em>last year (ie 2006) was one
\nof the first to come to my attention. I was certainly aware that KKR<\/a>
\nwas part of the successful bid for Myer<\/a>,
\nbut that didn’t seem to be much cause for concern. Coles
\nMyer <\/a>hadn’t known what to do with the iconic and once hugely successful
\nMyer brand for a long time and its stores were floundering despite Dawn
\nRobertson’s<\/a> best efforts. Count in that the consortium included
\nthe Myer Family<\/a> and it all seemed like a good idea. <\/p>\n

But then the separate semi hostile bid for Coles raised a lot of hackles
\nin the community here. Coles was another iconic Australian brand grown
\nfrom the battler success story of C.J. Coles — albeit suffering at
\nthe hands of the much more successful Woolworths<\/a>.
\nA lot of Australians just didn’t like the idea of big money from the
\nUSA trampelling all over our heritage.<\/p>\n

But the big one of course has been the APA<\/a> bid for Qantas<\/a>.
\nThere’s nothing much more iconic than the Flying Kangaroo<\/a>.
\nUnlike Myer and Coles, Qantas is a succesful business. But Qantas represents
\nmore than an icon. It represents the working conditions of thousands
\nof Australians and more than a million people in this country value
\n(like me) our Qantas frequent
\nflyer<\/a> points.
\nNow of course APA<\/a> claims to be majority Australian
\nowned and Australian controlled – it needs to be to satisfy the conditions
\nof the Qantas sale act<\/a>. However a significant amount
\nof foreign money is involved in the bid and questions remain around
\nthe degree to which the act applies to Qantas’ subsidiary Jestsar<\/a>.
\nWhat will happen to the working conditions of QANTAS and Jetsar employees.
\nWill they all be moved to Australian Workplace Agreements<\/a>,
\nin the process losing hard won benefits? Will maintenance operations
\nbe moved overseas? And, for millions of Australians, what will happen
\nto my frequent flyer points.<\/p>\n

Notwithstanding that I think the last of these questions is really
\nof much import, the others are of great concern to those involved and
\nrepresent possible encroaching by example of the working conditions
\nof millions of Australians. <\/p>\n

However, to my mind, none of these is the most important concern.
\nWhat bothers me most is whether the private equity partners in this
\ndeal (or any other for that matter) have any concern for what happens
\nto their prey in the long term. Take Qantas as a case in point. APA
\ncares for one thing and one thing only – the profit they can make from
\nthe deal. My concern is that APA will simply convert value into cash
\nin its own pockets.<\/p>\n

Now I might be wrong about this. Certainly the supporters of private
\nequity argue that these arrangements enable owners to free themselves
\nof the short-termism of public equity. They can be allowed to make
\nlosses, or at least not grow profit at the rate required by the market
\nfor extended periods. This, in our mind, is a good thing.<\/p>\n

However, is this really what they will do?<\/p>\n

I guess we will have to wait and see. <\/p>\n","protected":false},"excerpt":{"rendered":"

Unless you’ve been asleep, hibernating, or out of the country for the last 12 months, you will be well aware that the Private Equity phenomenon has well and truly hit Australia. I can’t remember when it actually hit my radar, but the KKR bid for Coles [Updated 20\/4\/07] last year (ie 2006) was one of […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,3,8],"tags":[],"class_list":["post-226","post","type-post","status-publish","format-standard","hentry","category-entrepreneurship","category-leadership","category-purpose"],"_links":{"self":[{"href":"https:\/\/chriscurnow.com\/index.php?rest_route=\/wp\/v2\/posts\/226","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/chriscurnow.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/chriscurnow.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/chriscurnow.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/chriscurnow.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=226"}],"version-history":[{"count":0,"href":"https:\/\/chriscurnow.com\/index.php?rest_route=\/wp\/v2\/posts\/226\/revisions"}],"wp:attachment":[{"href":"https:\/\/chriscurnow.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=226"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/chriscurnow.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=226"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/chriscurnow.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=226"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}