Allens Private Capital Sector Leader and co-Head of Private Equity Emin Altiparmak sees 2022 as the year private capital investors cemented their position as a driving force in our investment markets.
In 2022, we've seen private capital investors emerge with a powerful public voice in investments markets. They are passive investors no more. Deepening pools of private capital are focused on long-term societal priority areas such as digital infrastructure, energy transition and healthcare.
Private capital investors' ESG priorities are moving other market participants into action. As a lawyer, it's immensely rewarding to be working with clients as they shape not only our markets, but also the world in which we live. The renewable energy sector has lit up with activity in recent years given the significant flow of private capital directed to it, as one example. Next, the focus will be on new energy such as hydrogen. In the race for energy transition, private capital leads the way.
In other areas, private capital is focused on ever-increasing digital connectivity and the infrastructure underpinning that. In 2021-2022, we advised on every telco towers transaction in Australia and New Zealand: Telstra towers, Optus towers, Axicom, TPG towers and Vodafone New Zealand towers. Private capital appetite drove each of these transactions. We're now seeing a focus on the upcoming wave of telco fibre opportunities.
Private capital continues to prioritise healthcare opportunities across the spectrum of services. Traditionally the domain of private equity sponsors, the sector is now attracting longer-term capital and infrastructure-like interest such as in radiology and hospital assets. Look no further than Morrison & Co's buyout of QScan, and IFM's long-term private capital fund's buyout of PRP Imaging. These differing layers of private capital will stratify and expand the types of healthcare opportunities that attract interest.
It is exciting to be a part of such a dynamic and growing investment arena. The direction of private capital is more than a bellwether; it's a driving force in our investment markets.
Emin's three private capital trends to watch in 2023
Fibre assets will be the next digital infrastructure dominoes to fall
If 2022 was the year of the telco tower, 2023 will be the year of telco fibre. All the major telco tower assets in Australia and New Zealand changed hands over the past two years, with a total transaction value of more than $14 billion. Allens played a lead role in all of these transactions. With the global economy continuing to increase its reliance on digital infrastructure through demand for connectivity, data storage and transit, telco fibre assets in this region are the next frontier for private capital.
Momentum continues for energy transition
There's a huge appetite for energy transition assets among private capital investors, and it shows no sign of abating. Portfolios of Australian renewable energy assets proved hugely popular in 2022, and we'll continue to see significant ongoing interest as the global energy transition picks up pace and ESG drivers become increasingly important for investors. As we've seen in Grok Ventures' focus on AGL Energy, investors are demanding investee companies respond rapidly to investor preferences on ESG matters.
No target is off the table: rise of the mega takeover
With the enormous pool of private capital funds circulating in the Australian market - including a $3.5 trillion super fund pool which is expected to hit $10 trillion within a decade - no target is too large. 2022 saw a number of mega takeovers, including the largest cash takeover in Australian history, Sydney Aviation Alliance's $32 billion acquisition of Sydney Airport. A decade ago, these buyouts would have been unthinkable. Now, private capital consortia are showing a real appetite to cut some of the biggest equity cheques we've ever seen.