Private equity groups are circling La Trobe Financial Services Pty Limited, but Brookfield Business Corporation (NYSE:BBUC) and Brookfield Business Partners L.P. (NYSE:BBU) (Brookfield)'s big hope of gaining more than $3 billion for the business may come from a Japanese buyer. The North American private equity operator is going far and wide to search for a new owner, and is targeting groups from Japan as part of its quest to sell the business for top dollar. Japanese groups have a history of paying big prices for financial services businesses in Australia.
The downside for any seller is that they take their time, and there's often a lot of back and forward on price. They are also risk-adverse, so La Trobe, which derives income from retail investors, may not be to their liking, with them shying away from the business when Blackstone had it on the market before. If Brookfield wants a quick sale, perhaps a better bet may be a private equity group, but the compromise may be that it sells the business for a lower value.
Japanese groups to have invested in non-bank lenders include Shinsei Bank, an investor in the Kohlberg Kravis Roberts-backed Latitude Financial, listed on the ASX, although Shinsei is not thought to be a buyer, as it plans a stock exchange listing by next year. Working on the sale of the business are Morgan Stanley and UBS. La Trobe Financial manages $20 billion on behalf of mainly older high net worth investors with a key focus in real estate private credit.
Brookfield bought La Trobe from Blackstone for $1.7 billion in 2022.
