Kain Lawyers’ new boss Michael Garry on private capital boom

Private capital will continue to drive M&A activity, according to the new head of mid-tier M&A firm Kain Lawyers, despite the threat of tighter regulation.

Kain Lawyers managing director Michael Garry.

Private capital will continue to drive mergers, acquisitions and investment deals in Australia, according to the new head of mid-tier M&A firm Kain Lawyers, despite the threat of tighter regulation looming over the burgeoning sector.

Michael Garry has taken over as managing director after 10 years with the national firm, succeeding founder John Kain in a leadership transition that has been planned over the past two years.

As a senior director and holding key management and strategy roles in recent years, Mr Garry has supported the firm’s growth over the past five years, when it has trebled in size to 75 staff across Adelaide, Sydney and Melbourne.

Mr Garry, whose career in M&A and investment law spans 20 years, said Kain Lawyers was well placed to capitalise on the surge in private capital circling investment opportunities across Australia.

“We’ll be driven by where the money is being placed, and I think we’re going to continue to see capital deployed through the mid-market in those areas of Australia’s economic and societal needs around infrastructure and productivity needs, as well as social housing and health needs,” he said.

“A lot of the money that is flowing into those areas is actually coming from the private capital and private credit side of the market – we’re seeing a lot of demand for services, a lot of new entrants into those investment markets.”

The rise of private credit and private equity has accelerated since the financial crisis as regulators imposed heightened restrictions and regulations on the traditional banking system and public equity markets.

According to an ASIC report into private markets released in February, private market assets have increased from $57.1bn in 2014 to $148.6bn in 2024.

The corporate watchdog has voiced concerns around the opacity of invest­ments, conflicts of interest, valuation uncertainties, illiquidity and leverage, as well as the growing forays by retail investors into the private capital realm.

It could lead to further regulation, with ASIC due to provide a more detailed update on private credit later in the year.

With a recent beefing up of foreign investment rules, and with the ACCC’s merger reforms coming into force from January 2026 – requiring counterparties that meet certain financial thresholds to notify the competition regulator of their merger plans – Mr Garry acknowledges that investment markets are likely to face a more “complicated” regulatory environment over the coming years.

“I think further regulation is warranted. The real balance for our regulators, and for our government, is really trying to find that sweet spot between making sure we have open, efficient and transparent markets ... without really slowing down or blocking some of the pathways for investment capital,” he said.

“There’s a massive need for that private capital to pick up that gap where, particularly some of the government balance sheets can’t do that anymore. And so there’s a real balance for regulators in making sure capital can still freely flow where it needs to go, but make sure that there’s confidence in those markets, both from an investor perspective and also from an investee perspective.

“I think the next six months will be important for the ACCC to work out how they implement the practicalities of the reforms and their review of transactions. And I think if that goes smoothly and effectively, then whilst it is an additional regulatory administrative hurdle in doing transactions, if it’s run effectively I don’t think it’ll have a negative impact.”

Mr Kain, who established Kain Lawyers 21 years ago, is taking a sabbatical and will return later in the year as executive chair.

Under his leadership the firm has grown its national footprint, with its Sydney and Melbourne offices now home to more than 40 per cent of the firm’s 75 staff, and generating 60 per cent of the firm’s revenue.