ANZ’s private equity division faces write-downs

The division, which is in the process of winding down, saw two portfolio companies in its A$115m ANZ Business Equity Fund enter into administration in June.

The private equity arm of the Australian and New Zealand Banking Group (ANZ) is facing write-downs on its loans and investments, a spokeswoman confirmed.

She declined to provide figures or further information, but said a report in the Herald Sun that estimated the write-downs at more than A$300 million ($236 million; €169 million) was exaggerated.

In December 2008, ANZ decided to exit its private equity business and is currently in the process of winding it down. The bank formerly made investments from its balance sheet and through funds, including its most recent, the ANZ Business Equity Fund, which closed on A$115 million in 2006.

In June, two of the fund’s portfolio companies, pet food maker Bush’s International and sales distribution provider Blueprint Management Group, entered into administration. In January, the fund wrote off its investment in another portfolio company, Handy Hire, a trailer renting business.  

This March, the fund reported unrealised write-downs of A$6.75 million and A$4.2 million in Blueprint and Bush’s International respectively. It previously acquired a 17 percent stake in Blueprint for A$11.3 million and a 6 percent stake in Bush’s International for A$6.1 million.

The bank is expected to write off a minimum of A$30 million on its investment in Blueprint and suffer an A$20 million loss on loans made to the company, as well. Bush’s International reported a net asset loss of more than A$45 million in June 2008, according to the Herald Sun.

ANZ is not the only Australian firm to have seen some of its investments hit hard in the wake of the economic downturn. Australian boat builder The Riviera Group, a portfolio company of Gresham Private Equity and Ironbridge, entered into receivership in May. The same fate befell Australian Discount Retail, which is backed by CHAMP Private Equity and Catalyst Investment Managers, in January.