In mid-February EQT launched an office in Australia as part of its broader expansion into Asia-Pacific.
The office is led by head of Australia and New Zealand Ken Wong, a former executive director at Hong Kong’s Affinity Equity Partners who has overseen EQT’s efforts in the country from its Singapore office since 2018. It comes as the firm mulls a larger regional fund and an office in Japan.
EQT’s activity in Australia has been limited to date: its first deal was EQT Mid Market Fund’s acquisition – and subsequent exit – of I-MED Radiology Network in 2014 and 2018, respectively.
Last year, the firm acquired cloud service provider Nexon Asia Pacific via its EQT Mid Market Asia III and agreed to purchase New Zealand care village operator Metlifecare through its EQT Infrastructure IV.
Private Equity International caught up with Ken Wong to discuss its plans for the country.
How will you invest in Australia?
We’re not deploying out of EQT’s flagship equity funds in Australia just yet. Right now, we’re focused on deploying the infrastructure and mid-market Asia fund but in the longer term, being able to invest from the equity business is where we’d like to head. That would be our medium-term goal but there’s no concrete plans.
The longer-term view is to have a majority of EQT’s business lines in Australia and New Zealand but the infrastructure and mid-market funds are actively deploying. We don’t focus on a hard geographic allocation with EQT’s funds, but you’d hope with more people on the ground we’ll find more and better opportunities here.
[The Australia office] employs four investment professionals initially and is looking to build that out significantly in the medium-term. The four investment professionals are sitting within the infra business and we have some mid-market operatives in Singapore and Hong Kong working on the origination side.
How do you intend to stand out against more established firms?
Every sub-sector has different pricing: hot TMT sectors in China, for instance, have astronomical prices. Australia is a hyper-competitive market with most of the large global players and some formidable domestic players, but our differentiated position is that EQT is happy to pay up for a good company as long as there is a strong transformation strategy to make it better.
What threat do Asia’s headline risks pose to Australian investments?
The bushfires have had no impact on our move.
From a coronavirus perspective, Australia’s a bit more of a safe haven. It’s definitely going to have an impact on the Australian economy, in particular companies that are reliant on China. Tourism has been significantly impacted, because they’ve taken away the ability for Chinese visitors to enter the country, as has the education sector, which is one of Australia’s largest exports to China.
Ken Wong is head of Australia and New Zealand at EQT. Prior to joining the firm in 2018, he was an executive director at Affinity Equity Partners in Sydney, focusing on private equity investments in the TMT, entertainment, data and digital and consumer sectors. He has prior experience at Macquarie, based in Melbourne.