Perpetual lifts stake in James Packer’s Crown Resorts

Fund manager Perpetual has boosted its stake in James ­Packer’s Crown Resorts to become a “substantial” shareholder.

Crown Resorts executive chairman James Packer.

Fund manager Perpetual has boosted its stake in James ­Packer’s Crown Resorts to become a “substantial” shareholder.

A notice lodged with the Australian Securities Exchange late yesterday stated that Perpetual now had a 5.13 per cent interest in the casino operator.

Perpetual had reduced its stake in Mr Packer’s company late last year when the gaming billionaire’s private investment vehicle, Consolidated Press Holdings, increased its interest in the listed company to 53 per cent. Mr ­Packer had increased that stake via the use of a derivate product provided by Swiss investment bank UBS.

A range of institutions were believed to have sold into the UBS buy-up of Crown stock for Mr Packer, including Perpetual. Paul Skamvougeras, the head of equities at Perpetual, spent almost a decade working for the Packer family at Consolidated Press Holdings. Shares in Crown closed slightly higher yesterday at $12.05.

Perpetual’s move back up the share register at Crown Resorts comes as Colonial First State revealed why it had exited its small holding in the Australian-listed company. Colonial’s head of Australian growth equities Marcus Fanning outlined in the fund manager’s 2016 annual report titled Responsible Investment and Stewardship that it had quit Crown because of governance issues.

The fund manager, controlled by banking giant Commonwealth Bank of Australia, highlighted in the report that during 2015 Crown Resorts purchased a number of non-gaming assets, including 20 per cent of the Nobu restaurant chain for $US100 million in ­October and a 50 per cent acquisition of the related-party transaction of Mr Packer’s Ellerston Farm for $60m in August 2015. “These acquisitions raised concerns about the governance, risk appetite and independence of the board,” Mr Fanning said in the report. “Speculation around the privatisation of some of the Crown Resorts businesses and potentially an increase in advisory fees to James Packer and his investment company (Consolidated Press Holdings) have not improved the perception of the board.”

The move on Crown’s share register follows the company’s decision last week to reduce its stake in its Macau interest, Melco Crown Entertainment, with a $US800m ($1090m) share sale.