Behind the biggest private equity deals: AS Colour, Wet & Forget, Bayleys

There is more commercial nous in privately-owned businesses than publicly listed companies, according to the head of a major private equity firm.

“These private company owners are very savvy business people,” Direct Capital executive chairman Ross George told Markets with Madison.

“I think the bulk of business expertise lies in the private company world, and look, that’s because there’s more of them.”

George’s firm has raised $1.7 billion to buy into iconic businesses including homeware cleaning product Wet & Forget, AS Colour, Bayleys real estate agency, Rodd & Gunn, Pink Batts insulation, and many others over its 30-year history.

There were about another 1000 private companies it “really liked” on its investment wish list.

However, it would only invest in them if the owner of a business wanted external investment to fund revenue and profit growth.

“We wouldn’t invest unless we had inside information,” George explained.

“In the public company markets, it’s against the law.”

For example, he was introduced to the founder of AS Colour, Lawrence Railton, by the apparel company’s banker who knew of its international ambitions.

Direct Capital owns 30% of apparel company AS colour. Photo / AS Colour website

Direct Capital itself had increased competition with more private equity funds becoming available to investors domestically, such as Australia-based Pacific Equity Partners gateway fund.

“[Investors] they now know how big this private company market is,” George said at his bach in Omaha.

“When we started, there wasn’t this industry in New Zealand.”

Watch the full interview with Ross George discussing private equity, including details of its biggest deals, in today’s episode of Markets with Madison above.

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Disclaimer: The information provided in this programme is of a general nature, and is not intended to be personalised financial advice. We encourage you to seek appropriate advice from a qualified professional to suit your individual circumstances.

Madison Reidy is the host and executive producer of the NZ Herald’s investment show Markets with Madison. She joined the Herald in 2022 after working in investment, and has covered business and economics for television and radio broadcasters.