‘M&A conditions in a sweet spot’ – Beulah
Australian market conditions are ripe for merger and acquisition (M&A) activity through 2016, after a bumper 2015, a funds manager believes.
Beulah Capital chief investment officer, Dr Peter Mavromatis, said 2015 was the busiest period for takeover activity since the global financial crisis hit, providing a bright spot in a difficult year on the markets for investor, and forecast that M&A moves could intensify over the next 12 months.
"M&A conditions are in a sweet spot," he said.
"In a flat market it's important to consider some more alternative strategies, and takeovers is one which has shown an ability to add outperformance during ordinary market conditions.
"Australian companies look attractive to overseas buyers… the local share market's poor start to the year means that potential Australian takeover targets are now cheaper.
"The continued weakness in the Australian dollar makes Australian companies more attractive and there is unlikely to be a dramatic tightening of interest rates any time soon.
"Add to this the ongoing struggle for companies to grow organically, and more confidence by boards to initiate activity and it's a powerful mix."
Mavromatis noted that Beulah's Takeover Target Portfolio delivered an eight per cent return for investors in 2015, returning 15 per cent per annum since 2011.
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