Blue Sky Alternative Investments flat on debut, but MD says private equity opportunities ripe

A lukewarm listing doesn’t seem to faze Mark Sowerby: the Blue Sky Alternative Investments managing director has the long term in mind.

The Brisbane-headquartered diversified fund manager of alternative investments closed flat at $1 in maiden trade yesterday.

But Sowerby says that contrary to some expectations, he didn’t staring at the share price all day. He says he’s much more excited by the opportunities a listing will bring the young company.

“It’s not an exit. It’s an entry,” he tells SmartCompany.

Blue Sky defied a lacklustre start by raising $6.5 million in its pre-Christmas initial public offering. There are 26 staff members, and they have held on to 65% of the business.

So why list now?

Sowerby says a sharemarket listing gives comfort to potential investors that the company is well-regulated and well-staffed, and provides better access to capital as it grows.

And as allocations to his sector continue to grow, with mandatory super levels set to rise from 9% to 12% by 2020, a listing is part of helping Blue Sky getting a bigger piece of that pie.

Sowerby says there’s already a Blue Sky staff member in the US, and Asia could be next provided the right person can be found for the job.

The business, which has $180 million in assets under management across private equity, water, hedge funds and private real estate, is now the only publicly listed company dealing solely with alternative investments in Australia.

On private equity, Sowerby says it’s a great time to be investing, with reluctant banks leaving a gap that alternative investors can fill – at attractive prices.

“We’re seeing an amazing number of high-quality opportunities,” he says, noting that its position as an SME-focused investor leaves it inhabiting an attractive niche given other PE firms tend to focus on the higher end.

For investment themes, Sowerby says Blue Sky believes anything debt-driven over the past 20 years will struggle, but the necessities of life – food, water, resources – are where the opportunities lie.

Mining services and food are also attractive, he says, tipping a return of the wealthy pastorals of decades past.