Jeremy Bendeich from Avoca Investment Management says the current M&A cycle is likely being fueled by the availability of cheap credit – but it is also shedding light on value opportunities. With debt funding at record low levels there has been an arbitrage on offer for companies looking to make EPS accretive acquisitions funded by cheap credit. Add to this the benefit to offshore buyers from the weakening AUD along with a low growth environment – and it is easy to see why M&A has been hot. Bendeich says that while all M&A cycles come to an end, usually as credit becomes more expensive, the current interest rate environment suggests there will be more to come in this space. When it comes to identifying opportunities, Bendeich says value will be more apparent for those investors who can set a longer term investment horizon. In this video he outlines one sector where he believes the presence of M&A activity could be marking a ‘sea change’ for investor perceptions:
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