One of Perpetual Investments’ largest institutional clients, for whom it manages close to $1 billion in a sustainable Australian shares mandate, has said the fate of key portfolio managers will determine its reaction as the attempted private equity takeover by Kohlberg Kravis & Roberts (KKR) unfolds.
The chief investment officer of AustralianSuper, Mark Delaney, said the $38-40 per share offer from KKR added another layer of uncertainty over Perpetual, which has already been searching for a new CEO following the announcement of David Deverall’s resignation in March.
He said his investment team’s first priority was to see whether any takeover offer proceeded, and then to assess whether it could affect the performance it had enjoyed from Perpetual.
“There’s an excellent investment team there, so obviously we’d want to make sure that they were happy. But there’s a long, long way to go with this one,” Delaney said, although he noted he was glad to be an investor in Perpetual shares yesterday, after they jumped 20 per cent to trade just outside the bottom of KKR’s initial offer.
Delaney did wryly note that Perpetual’s shares had traded as high as $80 before.
Speculation was rife yesterday as to KKR’s strategy. It owns a minority stake in multi-affiliate funds manager Legg Mason, which perhaps not coincidentally, has been mentioned as the most likely buyer of Tyndall Investment Management from Suncorp.
Delaney knows about KKR’s negotiating skills firsthand, as the private equity giant recently purchased one of the gas pipelines owned by AustralianSuper.