AVCAL says “economic xenophobia” in decline(3)

Katherine Woodthorpe, chief executive of the Australian Private Equity and Venture Capital Association, has said Australian “economic xenophobia” has lessened after the Australian Senate’s inquiry into private equity.

The Australian Private Equity and Venture Capital Association has said the asset class is now understood in Australia despite “economic xenophobia” provoked by the attempted takeover of Australian airline Qantas.

Airline Partners Australia, the consortium of Macquarie, TPG, Allco and Onex attempted to take the Australian company private earlier this year. But it abandoned its plans in May after failing to secure the necessary 50 percent shareholder acceptance for its bid. In the process it sparked mainstream media and political interest in the industry across Australia.

Katherine Woodthorpe, chief executive, said: “This inquiry was largely provoked by the Qantas scenario which ignited some pretty strong sentiment. That time is past and judging by the last week I feel the asset class is understood by politicians, the public and the media.” This inquiry has been a catalyst which has galvanised Avcal to promote the industry, she said.

Much of the criticism of the industry last week, during the largely positive inquiry centred on tax breaks for off shore funds. This criticism gathered momentum in the Australian media on the back of the Qantas takeover and the abandoned takeover of Australian supermarket Coles by a KKR-led consortium.

Commenting on critics of foreign buyout firms, Woodthorpe said: “There will always be an element of economic xenophobia in all nations but we mustn’t forget it is a two way street.” Australian investment overseas is also substantial.

“The only problem is in Australia where you basically have two supermarket chains and one sizable airline, people notice and think about the changes more than in places like the UK.”