Graeme Hart: How a Tow-Truck Driver Built a Leveraged Buyout Empire

Graeme Hart is the closest thing New Zealand has produced to a one-man private equity firm, and his fortune rests on a single repeatable idea: borrow heavily against businesses too dull for anyone else to want. This profile explains where the idea came from, how Rank Group applies it, what Hart still owns after two decades of packaging deals, how his ownership and governance differ from a conventional buyout fund, and where the method has failed. It concentrates on the builder and his decisions rather than on any one portfolio company. It is part of the New Zealand Company Stories hub.

Who is Graeme Hart and where did he start?

Graeme Hart is an Auckland-born investor, born on 6 June 1955, who left school at 16 and worked as a tow-truck driver and panel beater before starting a small printing and hire business. He owns Rank Group, the private vehicle behind a string of leveraged buyouts in New Zealand, Australia and the United States.

The biography matters because it explains the temperament. Hart did not come through a bank, a law firm or a consultancy. He once described his younger self as having too much attitude in one pocket and not a cent in the other. He built a modest business in his twenties, then enrolled in the University of Otago’s MBA programme without an undergraduate degree and graduated in 1987. His MBA research paper is widely reported to have sketched the strategy he went on to use: acquire under-managed companies with stable earnings, use their own cash flow to service acquisition debt, and treat the first deal as the collateral for the second.

What stands out is how early the method was fixed and how little it has changed. Most founders refine a product. Hart refined a financing structure, and then applied it to printing, books, food, forestry and packaging without much regard for what the business actually made. In 2018 he gave NZ$10m to the Otago Business School, a rare public gesture from a man who almost never gives interviews.

How did the Government Printing Office deal create the template?

In 1990 Hart bought the state-owned Government Printing Office in a privatisation, paying less than its capital value and, by most accounts, about 1.4 times earnings. The deal gave him a cash-generative monopoly-like business bought cheaply from a seller that wanted to be rid of it. Every later deal copied that shape.

New Zealand in the late 1980s and early 1990s was selling state assets at speed, and buyers with nerve and a willing banker could purchase steady businesses at prices that looked absurd a few years later. Hart was a small operator bidding for an enterprise far larger than his own, and he funded it largely with debt. He then stripped out cost, sold property and used the cash to pay down borrowings.

The next step showed the compounding. In 1991 he bought the bookseller and stationer Whitcoulls Group, and within about two years his companies controlled roughly 40 per cent of New Zealand’s book and stationery market. He later sold Whitcoulls at a substantial profit. Three features of the template were now visible: a motivated or distracted seller, a product with dependable demand, and a balance sheet that could be re-engineered. None of the three depended on Hart knowing more about printing or books than the incumbent managers did.

How does the Hart playbook actually make money?

The playbook makes money from three sources: buying at a low multiple of earnings, raising margins through cost reduction and asset sales, and letting debt repayment transfer value from lenders to the equity holder. Because Hart puts in relatively little equity, modest improvements in the business produce large percentage gains on his own capital.

Hart has summarised the logic himself, saying that Rank borrows against streams of what it calls bond-like cash flows. The businesses he favours share a profile:

• Products that households or factories buy in every economic climate: bread, milk cartons, aluminium foil, rubbish bags, plastic bottles.
• Mature markets with few competitors, where demand is unexciting but predictable.
• A corporate parent that regards the division as non-core, which means limited competition for the asset and a seller willing to accept a clean, fast offer.
• Surplus property, forests or subsidiaries that can be sold to repay acquisition debt.

After a purchase, head-office layers are removed, capital expenditure is scrutinised and each unit is run for cash. Hart’s managers are known for austerity, and Rank itself operates with a very small central team in Auckland. The financing is as important as the operations. Rank became one of the largest issuers of high-yield bonds from this part of the world, and it habitually refinanced whenever credit markets were open, extending maturities before it needed to.

The model has a cost. Highly indebted companies have little room to invest for growth, and several Hart businesses shrank under his ownership. The return comes from the capital structure and the cash yield, not from building something larger than what was bought.

What was the Burns Philp gamble and what did it teach him?

Burns Philp was the deal that nearly ended Hart’s career and then made it. He bought into the Australian food group in 1997, saw the investment collapse within months when its herbs and spices business was written down, and chose to stay, recapitalise the company and rebuild it over a decade.

Hart joined the Burns Philp board in September 1997. The share price fell to a few cents after the write-down, wiping out most of the value of his stake. Rather than walk away, he supported a refinancing, sold the weakest divisions and concentrated the group on yeast and bakery ingredients, which had dependable margins. In 2003 Burns Philp launched a hostile takeover of the much larger Goodman Fielder for about A$2.4bn, funded with debt, a move that astonished the Australian market given where the acquirer had been five years earlier. Hart became chairman in September 2004.

He then reversed the process. Goodman Fielder was refloated, the yeast and spice businesses were sold, and in December 2006 Rank paid about A$1.6bn for the 42 per cent of Burns Philp it did not own. The episode established two habits that recur in every later deal: Hart does not sell at the bottom, and he treats a listed minority as a temporary inconvenience to be bought out once the value is visible.

Why did he move from food to forests and packaging?

Hart moved into forestry and packaging because the cash from Burns Philp needed a larger home and because packaging offered the same bond-like demand on a global scale. Between 2006 and 2011 he assembled, almost entirely with debt, one of the world’s largest consumer and beverage packaging groups.

The pivot began at home. In 2006 Rank bought Carter Holt Harvey, New Zealand’s largest forestry and wood-products company, for NZ$3.3bn and delisted it. The forests were sold to Hancock Timber for up to NZ$2bn, further property and facilities raised more than NZ$300m, and the pulp, paper and packaging arm went to a Japanese consortium in 2014 for NZ$1.037bn. Asset sales repaid much of the purchase price while Hart kept the building-products business.

The overseas sequence followed quickly:

Several of these purchases were made during or just after the global financial crisis, when sellers were under pressure and Hart was one of the few buyers able to raise money. The combined Reynolds Group carried debt that peaked in the high teens of billions of US dollars, a figure that made it a fixture of the American high-yield market.

Who owns and governs Rank Group?

Rank Group is owned outright by Graeme Hart. It has no outside shareholders, no limited partners and no public reporting obligation beyond what its bond-issuing subsidiaries and listed affiliates must file. Decisions are made by Hart and a handful of long-serving lieutenants in a small Auckland office.

This is the structural difference between Hart and the private equity firms he competes with. A fund must return capital within about ten years and charges its investors fees along the way. Hart has neither constraint. He held SIG for eight years before selling it to Onex in 2015 for up to €3.75bn, and he has owned parts of Carter Holt Harvey for two decades. He can also sit in cash for years, as he did between large deals.

Governance in the listed affiliates follows a consistent pattern. When Hart floated Reynolds Consumer Products and Pactiv Evergreen on Nasdaq in 2020, he sold minority stakes and kept roughly three-quarters of each through a holding entity, Packaging Finance Limited. Both qualified as controlled companies under exchange rules, which allowed boards weighted towards Rank nominees. Minority investors received a dividend stream and liquidity; control stayed in Auckland.

Family involvement is visible but limited in the public record. Since 2018 Hart and his son Harry have controlled Walter & Wild, a New Zealand food group that owns brands such as Hubbards and Gregg’s. It is small beside the packaging assets, yet it is the clearest sign of a second generation working inside the group. For a contrasting model of multi-generation ownership, see the profile of the Todd family and Todd Corporation, where around 200 relatives share one company.

What do the latest numbers say about Hart in 2025 and 2026?

The 2026 NBR Rich List values Hart at NZ$14.1bn, up from NZ$12.1bn in 2025, which ranks him second behind Mat and Nick Mowbray of Zuru at a combined NZ$20bn. He remains the wealthiest individual New Zealander on most measures, and Forbes has placed him at around US$10bn.

The main event of the period was the exit from Pactiv Evergreen. In December 2024 Novolex, a packaging group backed by Apollo, agreed to buy the company for US$18 a share in cash, valuing it at about US$6.7bn including debt. The deal closed in April 2025, two months before Hart turned 70. He owned about 77 per cent, and NBR calculated his proceeds at US$2.48bn, or roughly NZ$4.16bn. The shares had been floated at US$14 in 2020 and had spent much of the interval below that price, so the exit was respectable more than spectacular; the larger return had already come from years of dividends and refinancing while the business was private.

That leaves Reynolds Consumer Products as the principal listed asset. It sells Reynolds Wrap foil, Hefty bags and store-brand equivalents, mostly in the United States, and Hart’s stake of about 74 per cent produces a steady dividend. Graham Packaging remains private. In New Zealand, Carter Holt Harvey has been shrinking for years, closing or selling mills as the domestic building cycle weakened, a pattern also felt by rivals covered in the story of Fletcher Building’s long conglomerate crisis.

Who competes with Hart for deals?

Hart’s competitors are the large American and Canadian buyout firms, such as Apollo, Onex and Cerberus, and strategic packaging groups looking to consolidate. He has sold to several of them. In New Zealand itself he has had no real rival as a leveraged acquirer of large companies.

His advantages over the funds are speed and certainty. A seller dealing with Rank negotiates with one decision-maker who needs no investment committee and has a long record of closing. His disadvantage is scale in the current market: the largest buyout firms can now write equity cheques far bigger than his, and corporate carve-outs of the kind he favoured in 2006 to 2011 attract crowded auctions.

Within New Zealand the useful comparison is with other builders in this series, because it shows how unusual his route was. Sir Peter Beck created value through engineering and equity markets, and Sir Stephen Tindall through a retail format and then venture investing. Hart invented no product and founded no brand. The closest institutional cousin is the listed investor described in Infratil’s infrastructure story, which also buys cash-yielding assets with leverage, although with public shareholders and far more disclosure.

Where has the playbook failed?

The playbook has failed where the cash flows turned out not to be bond-like. The clearest case is Rank’s car-parts business: UCI International, bought in 2011, filed for Chapter 11 bankruptcy protection in the United States in 2016 after losing key customers. Hart’s equity in that company was largely lost.

Other outcomes were merely ordinary. Pactiv Evergreen’s years as a listed company were marked by mill closures, restructuring charges and a share price that lagged the market. Carter Holt Harvey has been criticised in New Zealand for under-investment and plant closures in regional towns, and it faced long-running litigation over building products used in leaky schools. The original Burns Philp stake was, for several years, a severe loss before it became a triumph.

There is also a concentration risk particular to a one-owner empire. Rank has no institutional succession plan in the public domain, its decision-making is personal, and its remaining assets sit in a mature packaging sector exposed to plastics regulation, retailer private-label bargaining power and American consumer demand.

What can founders and CFOs learn from Graeme Hart?

The practical lessons are about capital structure, seller psychology and patience. Hart shows that a disciplined financing model can be as much a competitive advantage as a product, provided the underlying cash flows are chosen with care and the borrower keeps options open.

1. Choose boring on purpose. Staple products with flat demand support more debt, at lower rates, than exciting ones. The absence of growth is the feature that makes the financing work.
2. Buy from sellers who want to leave. Governments privatising and conglomerates shedding non-core divisions care about certainty and speed as much as price.
3. Make the asset pay for itself. Carter Holt Harvey’s forests and property repaid much of its own purchase price. Identify the saleable parts before signing.
4. Refinance early. Rank extended maturities when markets were open, not when bonds were due. A CFO’s best protection is time.
5. Own the equity. With no fund clock, Hart could wait a decade for Burns Philp to recover. Permanent capital changes which decisions are rational.
6. Keep the centre tiny. A head office of a few dozen people running tens of billions in assets is itself a cost discipline.

The limits deserve equal attention. The method produces cash, not innovation, and it depends on credit conditions that an individual cannot control. Founders building growth companies will find more relevant models elsewhere in the Founders Hub.

What happens next for Graeme Hart and Rank Group?

The next phase turns on what Hart does with several billion US dollars of cash and whether he continues to simplify. At 71 he has sold more than he has bought for a decade, and the remaining portfolio is smaller, less indebted and easier to pass on than the empire of 2011.

Three paths are plausible, and they are not exclusive. He could make one more large acquisition if credit markets and valuations offer a seller under pressure, the conditions in which he has always done his best buying. He could take Reynolds Consumer Products private again or sell it, completing the exit from the packaging group. Or he could continue shifting towards a family investment office with property, food and financial assets, in which Harry Hart’s role would grow.

What is unlikely to change is the style. Hart has shown no interest in public profile, institutional partners or diversification into fashionable sectors. Whatever comes next will probably be announced in a short stock exchange filing, funded largely with other people’s money and aimed at a business that sells something nobody thinks about twice.

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