Australian Pub Fund aims for IPO within months
Australian Pub Fund, which is chaired by former Qantas Airways Ltd. Chief Executive Geoff Dixon, is planning an initial public offering, according to a person familiar with the matter.
The move could see the fund listed on the Australian Securities Exchange by the first quarter of 2014.
Australian Pub Fund shareholders include (from left) Paddy Coughlan, John Singleton and Geoff Dixon, pictured at the Marlborough Hotel
The fund's backers include private equity and venture capital investor M.H. Carnegie & Co. and Australian superannuation fund Sunsuper. Its market value will likely be around 350 million Australian dollars (US$325 million).
The fund's portfolio includes around 15 bars and pubs in Australia's New South Wales and Queensland states, with flagship assets like the Marlborough Hotel and Kinselas Bar in Sydney, and the Elephant Arms and Stock Exchange Hotel in Brisbane.
A successful IPO will underscore ongoing interest from investors in pubs, which are considered defensive because they retain the value of the property. ALE Property Group Ltd., which owns around 90 pubs across Australia, has rallied 18% so far this year, outperforming the benchmark S&P/ASX200 which has risen 13%.
The Australian Pub Fund IPO would boost M.H. Carnegie & Co.'s returns as the activist fund manager prepares to raise to A$300 million for its second fund in the new year, to be split across venture capital and other investments. Its venture capital arm has already secured A$40 million from the Australian government's Innovation Investment Fund, on the condition the same amount is raised from the private sector.
M.H. Carnegie & Co. has spent around 60% of its debut A$170 million fund, and once that figure rises to 75%, it will kick off fundraising for the second fund.
Existing investments include stakes in software provider Assetic, Strike Energy Ltd., Brickworks Ltd and Washington H. Soul Pattinson Ltd. It also owns a stake in online comparison service One Big Switch, which is poised to launch a private capital raising before pursuing an IPO.
Investor thirst for exposure to Australian bars and pubs is also being tested by Redcape Hotel Group, which is backed by U.S. investors Varde Partners Inc. and York Capital Management, another person familiar with the matter said Tuesday. The duo teamed up with Goldman Sachs Group Inc. to recapitalize Redcape in 2011, before Goldman sold its stake earlier this year.
Varde Partners and York Capital Management are considering their options, including an IPO of Redcape, which leases its bars to the liquor arm of Wesfarmers Ltd.'s supermarket chain Coles.
Source: The Wall Street Journal, 17 September 2013
