Investec Australia to focus on mid to small cap deals

The CEO of the South African bank, fresh from an asset sale to Bank of Queensland, says his team will now focus on advising companies valued at up to $200 million.

Investec Holdings (Australia) chief executive Ciaran Whelan says the company’s 25 member corporate advisory team is now focused on advising companies valued at between $50 million and $200m amid a pick up in deal activity, especially among private equity firms seeking to dispose of or acquire companies.

Investec, a Johannesburg-based bank, announced today it sold Investec Bank (Australia’s) asset finance and leasing business to Bank of Queensland. BOQ will spend $440m, of which Investec will get $210m, says Mr Whelan. The balance of $230m includes the estimated capitalisation of the acquired businesses at completion of the deal.

The new focus for Investec’s Australian-based advisors means it will be competing for mandates against Tom Miles’ Sydney-based boutique Miles Advisory Partners, Brisbane-based broker Morgans and Credit Suisse, which this year set up a team to advise companies with market values of less than $2 billion.

“We’re not pitching against Goldman Sachs and Macquarie,” Mr Whelan told Data Room in an interview at Investec’s Sydney offices. “We have particular niches. We have particular skills in gaming and entertainment as well as health care. We’re very busy. Private equity is looking to buy or sell.”

Last year, Investec advised family-owned poultry producer Inghams on its $880m sale to US private equity giant TPG. In 2012, it advised the South Australian government on the $427m sale of SA Lotteries.

After the sale is completed, Investec’s work force in Australia will shrink from the current 450 people to between 80 to 90 people, he says. Mr Whelan says the company will now focus on corporate advisory and lending and attracting investors to its aviation and property funds.

Mr Whelan says Investec is looking to raise more money for its Johannesburg-listed $130m property fund listed last year, declining to comment further. The company’s aviation business has about $1 billion in funds under management.

The 26 year Investec veteran, who is also global head of private banking, says he “lives on a plane.”

“People have more confidence globally,” says Mr Whelan.

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