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Hedge Funds Invest in Australia

Hedge Funds Invest in Australia

Hedge Funds Fill Funding Gap For Australian Companies


Australian companies are getting some help from hedge funds as banks are still reluctant to lend.  KPMG estimates that Australian companies have some $200 billion of syndicated loans due to mature in the next four years.  But a funding gap still exists even with increased investments by hedge funds.
Australian non-financial companies sold A$2.39 billion ($2.2 billion) of bonds in the nine months to September and face an “onerous” task refinancing their maturing debt, Fitch Ratings said an Oct. 7 report. Hedge fund assets may top the previous $2 trillion high by the end of next year as double- digit average returns lure investors, Barry Bausano, Deutsche Bank AG’s global co-head of prime finance, forecast this month.

Hedge funds are focusing on companies needing between A$25 million and A$75 million and may be able to fill a funding void borrowers can’t meet with bank loans or share sales, according to Heathcote.

“Companies would be better prepared by investigating all options and not necessarily going down the typically more expensive equity route,” he said.

Australian businesses raised A$120 billion from equity sales between July 2008 and September 2009, Belinda Gibson, commissioner at the nation’s securities regulator, said at a conference yesterday.   Source

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