Babcock & Brown, the Australian private equity fund that has just completed the €2.4bn ($3.1bn) buyout of Irish telecoms operator Eircom, is considering a strategic investment in Australia's largest company Telstra.

Babcock executive Robert Topfer told the Sydney Morning Herald that the fund would not rule out taking shares in the telecoms group, following reports that rival Macquarie Bank is looking to buy part of the business. A 5% stake in Telstra would be worth about A$2.3bn (€1.4bn), the paper said.