Blue Harbour Capital Newsletter – December 2025 Edition
Letter From The Editor
Across Australia and New Zealand, a once in a generation transition is underway.
Research across the region suggests that close to half of Baby Boomer business owners plan to exit within the next one to five years. A large share expect the sale of their business to fund their retirement. At the same time, fewer than one third of SMEs in Australia and New Zealand have a documented succession plan.
That gap between intent and preparation is not just a technical problem.
It is a structural risk to jobs, communities and local economies. When succession is left too late, good businesses are sold under pressure, broken up, or moved offshore. Employees and customers often feel the impact first.
The question is not if ownership will change hands; the question is who, when and how will it take place.
The encouraging news is that founders and leadership teams now have more options than ever before. Employee-led buyouts, employee ownership trusts and other shared ownership models are beginning to move from niche concepts into practical tools that can be applied in everyday SMEs with 10 to 250 staff. New surety backed capital structures mean that employees and management teams can step into ownership without risking their homes, while founders can secure value and continuity.
Blue Harbour exists to help founders and leadership teams make that shift. Our focus is simple: turn succession from a risk into a people first, employee led opportunity, and then support those new owners so that the transition works in practice, not just on paper.
Thank you for reading and for being part of a growing community of founders, advisors and leadership teams who care about legacy, people and continuity, not just exit dates.
David Harris, Managing Partner at Blue Harbour Capital
In this edition you will find:
- Market context on the succession wave in Australia and New Zealand
- An update on Blue Harbour’s partnership with Valloop and the Guy Carpenter surety facility
- An introduction to our new Succession & Ownership Assessment
- Guest perspectives from Valloop, Mahoneys and an experienced CEO and business coach
- Highlights from recent events in Adelaide, Brisbane and the Gold Coast, plus an invitation to Tasmania
- Practical tools and further reading if you are starting to think about your own succession
Market Overview
The Succession Wave in Australia and New Zealand
Australia – Big Transitions, Limited Planning
Australia is heading into the largest SME succession wave in its history.
Recent research suggests that around 48 percent of Baby Boomer business owners plan to exit within the next one to five years, and roughly one third are relying on the sale of their business to fund retirement. At the same time, only about a quarter of SMEs report having a formal succession plan in place. That gap is often described as a trillion dollar succession problem.
Employee ownership advocates in Australia have been warning for some time that without new models many viable businesses risk being closed, sold offshore or consolidated into larger corporates. They point to the United Kingdom, where more than two thousand businesses have moved into employee ownership trust structures, as evidence that employee led succession can scale when the right frameworks, capital partners and advisory support exist.
Overlaying this is a capital shift. The Guy Carpenter and Valloop partnership has unlocked tens of billions of dollars of surety backed capacity globally for SME employee buyouts. For the first time, this structure is explicitly available in Australia and can be applied to employee led transactions in $A2 million to 100 million dollar turnover range. That gives founders and teams a way to fund internal buyouts without relying solely on personal guarantees and residential security.
New Zealand – A Nation of Small Businesses, An Ageing Ownership Base
New Zealand is a small business economy. There are a little over 600,000 businesses in total and roughly 97 percent of them have fewer than 20 employees. These firms are the backbone of employment, regional services and local communities.
Government research indicates that around 57 percent of businesses have owners or managers over 55. Older owners, on average, report lower growth appetite and often have less formal succession planning in place. Other advisory surveys suggest that around 40 percent of small business owners plan to exit within five years and around 60 percent are relying on sale proceeds to fund their next chapter, yet many do not have robust written plans to get there.
At the same time, employee share schemes, profit participation models and early stage employee ownership structures are starting to gain traction as tools to retain staff and gradually transition equity. Interest is increasing faster than infrastructure, which is why clear frameworks, templates and advisory support matter.
Global Employee Ownership Developments – Why This Matters Locally
Globally, employee ownership has moved from the fringe to the mainstream.
The UK now counts thousands of employee ownership trusts, even as governments refine tax relief rules to keep structures aligned with genuine stewardship rather than purely tax driven strategies. In North America and Europe, employee share ownership and hybrid models that blend employee ownership with long term capital are expanding.
For founders in Australia and New Zealand, the signal is clear. The models are proven. The capital is starting to arrive. The question is how to adapt those structures to local law, local banking practice and local culture in a way that fits your business.
That is the space Blue Harbour and our partners operate in.
Announcements
Strategic Partnership & Capital Facility
Australia’s First Complete Ecosystem For Employee Ownership
We are pleased to share more detail on Blue Harbour’s strategic partnership with Valloop.
Valloop is a global employee ownership platform that has developed structures to turn institutional balance sheets into capacity for employee buyouts in real world SMEs. Partnering with Guy Carpenter, they have created a surety backed facility that supports employee led acquisitions in businesses with 10 to 250 staff and turnover in the A$2 to $100 million dollar range.
Together, we are bringing that capability to Australia and New Zealand as part of what we describe as a complete ecosystem for employee owned business succession.
This ecosystem rests on three pillars:
Specialist advisory network coordinated by Blue Harbour
Legal, tax, valuation, governance and succession coaching support so that deals are well structured, aligned with founder goals and sustainable over time.
Readiness, education and capability building
Practical tools, workshops and assessments that help founders, leadership teams and employees understand their options, build a realistic roadmap and prepare for ownership.
Enabling platform and infrastructure from Valloop
Diagnostics, collaborative workspaces and surety backed structures that reduce or remove the need for personal guarantees in many internal buyouts, and connect employee led deals to institutional capital.
For founders, this combination means greater vendor certainty and more paths to internal succession. For employees and management teams it means the chance to acquire the business they help run without putting their family home on the line.
For us at Blue Harbour, it provides the missing infrastructure that allows employee led buyouts to scale in Australia and New Zealand, rather than remaining one off exceptions.
You will find a deeper dive into the capital structure and philosophy in the contributed Valloop article.
Introducing the Blue Harbour ELBO & EOT Readiness Program
Founders often ask a practical question: “I know the options. What is realistic for my business and my team?”
Our Readiness Assessment answers that with a quantified baseline and a clear Gap‑to‑Green plan that mirrors how lenders and surety providers evaluate SME succession.
Who it is For
Privately owned SMEs in Australia, New Zealand, the United Kingdom and Canada that are exploring a management or employee‑led path to ownership, including ELBO, MBO and EOT.
What it Measures
We score your business across six pillars that financial partners care about, with banding from AAA to C and a pathway to lift your score where it matters most:
- People and Teams
- Commercial Mode
- Primary Factors
- Values and Ownership Intent
- ESG and Stewardship
- Legal and Risk History
How The Assessment Works
Step 1. Orientation and intake
A 90‑minute ELBO/EOT 101 for the founder and senior team. We align scope, scan for early blockers and confirm objectives and timeframes.
Step 2. Data room build
We assemble the core evidence set: financials, people and leadership information, legal and contracts, projections, and governance artefacts.
Step 3. Pillar scoring and diagnostics
We run cash flow and margin tests, leadership and team interviews, governance, legal and ESG scans, and create a risk and issues log. Each pillar receives a 0–100 score and band.
Step 4. Findings workshop and board‑ready report
You receive a Readiness Scorecard with heat map, current band and pathway to the next band, a Gap‑to‑Green plan, a draft funding narrative, and a draft 100‑day plan and KPI set.
What Founders Receive
- A defendable Financial Partner Readiness Score across the six pillars, with AAA–A indicating strong probability of support, BBB feasible with a clear pathway, and BB or below indicating material gaps to close.
- A Gap‑to‑Green plan that prioritises the actions that move your band.
- A board‑ready report that unifies owners, advisors and lenders around the same facts.
- A draft 100‑day cadence and KPI dashboard so operating rhythm is set before a deal, not after.
What Happens Next
After the Assessment you can stop with a clear roadmap, or move into a tailored Program that closes the most material gaps. Programs range from a focused 4–6 week sprint to a multi‑month cadence aligned to a 12–24 month horizon. Core modules include Owner‑to‑Operator Leadership, Financial Excellence, Commercial Resilience, Governance and Legal Hygiene, Culture and Ownership Education, and 100‑day Post‑Transaction Readiness.
Why This Matters
You gain shared understanding of ELBO and EOT options, a funding narrative aligned to lender expectations, and a plan that ensures the transition works in practice, not just on paper.
Call To Action
If you want an employee‑led transition that earns confidence from financial partners and builds confident new owners, start with our 4‑week Readiness Assessment. Let’s talk about your timeline, your gaps and your next steps.
Tools & Resources
Business Readiness Test
A short online diagnostic for owners and leadership teams to gauge readiness for succession and employee ownership. It takes a couple of minutes and provides a simple starting point for deeper discussion.
Business Succession Guide
The guide covers:
- Succession pathways including family, MBO, ELBO, EOT and third party sale
- Employee ownership models across Australia, New Zealand, Canada and the UK
- Designing multi year succession roadmaps
- Financing internal buyouts when the team does not have capital
- 100 day post deal planning, coaching frameworks and KPI monitoring
It is designed as a practical handbook that you can use with your advisors and leadership team.
Blue Harbour Capital Succession & Ownership Assessment
This is our structured assessment and roadmap process for founders and leadership teams considering internal succession or employee led buyouts.
If you would like more detail on any of the tools mentioned here, reply to this newsletter or contact us directly and we will share next steps.
Columns
This piece is contributed by Ben Lightfoot, an experienced CEO and business coach. It explores the importance of coaching for both founders and management teams when planning succession and navigating an employee led buyout. The article also acknowledges how Blue Harbour collaborates closely with independent business coaches while remaining focused on advisory and post transaction support rather than providing coaching as a direct in house service.
Giles Karhan’s article explains how the Valloop and Guy Carpenter structure transforms institutional balance sheets into capacity for employee led buyouts in SMEs with 10 to 250 staff and turnover between 2 and 50 million pounds. He explores why banks and traditional lenders often struggle to fund internal buyouts without heavy personal security, and how surety backed structures can give founders vendor certainty while allowing employees or management to acquire without risking their homes.
He also sets out the values based design behind the facility. The focus is on businesses that want continuity of culture, jobs and community presence, rather than short term financial engineering, and on practical collaboration between Valloop as capital platform and Blue Harbour as readiness, advisory, transaction support and post deal coaching partner.
This article from Mahoneys, authored by partner Rhys Williamson, covers the legal foundations for employee led succession. It touches on issues such as contracts, intellectual property, regulatory approvals, documentation and governance when ownership changes hands, and offers a practical checklist for founders considering ELBOs, EOTs and related structures.
Events & Community
On the Road – Succession and Employee Ownership Events
Over the past few months we have been on the road with partners and local advisors, helping to put employee led succession onto the agenda for founders, coaches and capital partners.
Adelaide – ActionCOACH ANZ Succession Event,
16 October
Brisbane – “Succession Through ELBOs, EOTs and Surety”, 13 November, MoBoCo (Southbank)
Gold Coast – “Succession Through ELBOs, EOTs and Surety”, 27 November,
Riva (Robina)
Event: ActionCOACH ANZ Succession Event, Adelaide
Focus: Presentation on employee led buyouts and employee ownership trusts as practical succession options for Australian SMEs
Highlights:
- Strong interest from business coaches in how ELBOs can extend and deepen their coaching work
- Clear demand from founders for options that protect legacy and staff, not just price
Format: Blue Harbour roundtable on internal succession models and surety backed funding
Highlights:
- Walkthrough of how surety structures can reduce the need for personal guarantees in internal buyouts
- Lively discussion with local advisors and founders on where ELBOs fit relative to trade sales and private equity exits
Format: Regional roundtable with founder, advisor and capital partner perspectives
Highlights:
- Sector specific discussion for tourism, healthcare and services businesses
- Emphasis on keeping ownership and decision making rooted in local communities rather than moving offshore
What Is Next – Table Cape Roundtable: Succession Through ELBOs, EOTs and Surety
Date: Thursday 8 January 2026, 5:00 pm to 7:30 pm
Location: 72 Tollymore Rd, Table Cape, Tasmania
Audience: SME advisors, founders, financial partners and government stakeholders
Agenda highlights:
- Introduction to employee led succession in practice, led by David Harris
- Q&A and roundtable discussion facilitated by David Harris and Hunter Page (Valloop)
- Networking drinks and canapés focused on building a people first succession community in Tasmania
If you are based in Tasmania or have clients in the region, we would love to see you there.
Closing Note
A Better Future For Business Ownership in AU and NZ
The succession wave across Australia and New Zealand is real. So are the solutions.
Employee ownership, when paired with thoughtful advisory work, coaching and the right capital structures, allows founders to achieve fair value while preserving jobs, culture and community presence. It allows employees and managers to become true stewards of the businesses they have helped to build.
At Blue Harbour we believe succession is not just a transaction. It is a leadership choice about what kind of economy and communities we want to hand to the next generation.
If this edition has sparked questions or ideas, we invite you to:
- Share it with a founder, advisor or colleague who is thinking about succession
- Reach out to discuss your own situation or that of a client
- Join us at an upcoming event to continue the conversation in person
Let’s make the next decade one where more businesses stay in local hands, more employees share in the value they create, and more founders can step into their next chapter with confidence.
