* $70 billion worth of privatisations expected over threeyears
* Banks bulking up include Barclays, RBS, SocGen, Naxitis
* But shock election result has taken key assets off thetable
By Sharon Klyne
SYDNEY, Feb 5 (Reuters) - European investment banks thatscaled back in Australia after the global financial crisis arescrambling to rebuild advisory and financing teams, keen for aslice of A$90 billion ($70 billion) worth of privatisationsexpected in the next three years.
Australia's government has been pushing states to sellports, energy generators and electricity networks to pay downdebt and fund new public works. Privatisations in the pipelinecould generate combined bank fees of more than $1 billion,according to Reuters estimates.
"As we look at pan-Asia Pacific investment bankingopportunities for the next 24 months or so, Australianinfrastructure would be one of the very top areas of interest,"said Richard Satchwell, co-head of investment banking atBarclays Australia.
With investors focused on countries possessing high creditratings and transparent, independent legal systems, Australia is"very much at the heart of things," he said.
The UK investment bank has added headcount and shifted thefocus of some senior bankers to prepare for such deals, althoughit declined to provide details.
Royal Bank of Scotland has created a new three-maninfrastructure and acquisition finance team, a person withdirect knowledge of the matter said. Societe Generale is hiring some bankers for its Australian energy and resourcelending business, a separate source familiar with the mattersaid.
"We have our energy & natural resources team in Australiaand we have remained active over the years," a Societe Generale spokeswoman said in an email. RBS declined to comment.
NAXITIS, ROTHSCHILD
European banks will, however, have a way to go compared tothe strongest investment banking teams in Australia.
Last year, announced M&A deals involving Australian firmsjumped 16 percent to $116 billion, Thomson Reuters data shows,with an A$7 billion toll road firm sale by the state ofQueensland the top ranking privatisation and second-biggest dealoverall.
Advisory fees for completed deals soared 53 percent to $626million, according to Thomson Reuters/Freeman Consulting Coestimates. No European bank made the top five which accountedfor half of all fees earned. Goldman Sachs led the feerankings with $97.1 million.
Also bulking up is France's Natixis, which shut upshop in Australia in 2012 but says it has since rehired aproject finance banker and transferred a senior infrastructurebanker from Canada.
Rothschild, one of the few European banks not to cut Australian headcount after the global financial crisis, clincheda high-profile hire last year - that of Danny Bessell, a formerGoldman Sachs banker for utilities and infrastructure, to manageits privatisation work.
It has since won a role of lead financial advisor to WesternAustralia on the A$2 billion sale of two ports.
With Australian M&A bouyant overall, U.S. firms are alsowading in. Evercore Partners this week announced analliance for cross-border M&A advisory services with a new firmformed by three local investment bankers. Last month, U.S.investment bank Houlihan Lokey opened an office in Sydney.
There are, however, risks to the bullish outlook for A$90billion worth of privatisations. That figure would have beenA$40 billion bigger but for a shock weekend election result inQueensland, where the Labor-led opposition is poised to winpower on promises to take those asset sales off the table.
Assets expected to be sold this year include a stake in NewSouth Wales state's energy grid and as well as several shippingports. Victoria state has kicked off with the A$5 billion saleof the Port of Melbourne, which is expected to attract localfunds such as Industry Funds Management and QueenslandInvestment Corporation. ($1 = 1.2850 Australian dollars) (Additional reporting by Byron Kaye and Cecile Lefort inSydney; Editing by Edwina Gibbs)
Barclays (BARC)
