Out of the 4 original bidders for Virgin Australia (BGH Capital, Indigo Partners, Cyrus Capital Partners and Bain Capital), these are the 2 companies that made the cut: Cyrus Capital Partners and Bain Capital! Boston-based Bain Capital has $105 billion in assets and New York investment company Cyrus Capital Partners $4 billion. One of the main reasons for which Cyrus Capital Partners made the cut was that its founder, Stephen Friedman, is a former board member of Virgin America (this airline ceased operations in 2017, due to a merger with Alaska Airlines), a branch of one of Richard Branson’s numerous endeavours. Canadian firm Brookfield (which has an enormous $515 billion worth of assets) came in later in the race, but dropped out early (why?!). Indigo Partners is a private equity firm based in Phoenix, Arizona that (literally) only invests in airlines. To have that kind of a company taking a stake in your firm is not financially sustainable, as everybody knows that investing in the aviation industry is a bad move. Melbourne-headquartered BGH Capital is relatively new, as it was founded in 2017. This could be one of the reasons why it didn’t get selected, because new companies are usually inexperienced but it could also be that it didn’t have the funding to invest in Virgin Australia. Cyrus Capital Partners held a majority stake in Connect Airways (40%; Virgin Atlantic held a 30% stake in this consortium as well), the consortium created to save Flybe, so it already has a bit of experience in the aviation industry (and, 4 months later, Flybe went bust; Bravo… some success!). If you know why or why not certain companies got selected and why Brookfield dropped out, please do not hesitate to write a comment below. 3rd of June 2020.
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