Market, political and regulatory forces all conspired to slow deal activity in Australia in 2019. But the lull will soon finish, writes Shaun Drummond
Few infrastructure dealmakers expect a repeat of the heady days of mega privatisations that ended in 2018.
But many have told Inframation they expect 2020 to be a busier year than the current one.
“There is more activity at the big end of town,” says a fund manager at a large super fund. “There are definitely opportunities now. We have been surprised.”
“We have seen a step change in activity” in recent months, says Tom Butcher, head of transport, infrastructure, power and utilities at Credit Suisse in Australia. “Things are coming back up from the bottom drawer, and it is across the board.”
Deal activity was hindered by elections in Victoria, New South Wales and federally between November 2018 and May 2019.
Butcher also points to a “dislocation” in capital markets, with a collapse in equity markets at the end of 2018 and then a rally early in 2019 followed by interest rates falling sharply again, including a series of rate cuts in Australia.