VPEG4 will only make investments into or alongside, later expansion and buyout funds that target the consistently strong performing, lower to mid-market segment of Private Equity in Australia, where businesses typically have an enterprise value of between $25m – $250m at initial investment. This segment of Private Equity is attractive due to the following reasons:
- There is less competition for deals, businesses can be purchased at lower purchase multiples and lower levels of debt are utilised in this segment than the highly competitive, large or mega market private equity fund space, that is dominated by global private equity firms.
- The majority of growth in value of private equity backed businesses in this segment is generated by sustainable earnings enhancement rather than the financial engineering or cost cutting approach that is typical of the larger market space.
- Private Equity executives work more actively in partnership with the management of portfolio companies in this segment and bring deep financial and business skills as well as the broad networks and experience that are essential for transformational business growth.
- This segment also benefits from the ability for Private Equity funds to exit (or sell) portfolio companies by several different methods, including;
- an Initial Public Offer (or listing on a public market),
- a Trade Sale to a larger industry player or
- as a “Secondary Sale” to a larger, often global, private equity fund.
As VPEG4 develops its Private Equity portfolio over time, a summary of each underlying fund commitment and investment is provided below.
VPEG4’s Investment Committee approve a $2 million co-investment alongside Allegro Fund IV into Gull New Zealand, a leading independent fuel distributor and retailer in New Zealand with a prominent challenger brand through its network of 112 fuel sites across the country, regional New South Wales.
VPEG4’s Investment Committee approves a $2 million co-investment alongside Next Capital Fund IV into Compare Club, a leading personal finance comparison site operating across Australia, providing a comparison opportunity for customers across various types of insurance and loan products, as well as providing brokerage services.
Details of VPEG4′s Current Private Equity Commitments:
|Private Equity Fund Name||Fund / Deal Size||Vintage Year||Investment Focus / Type||VPEG4 Commitment||Capital Drawn Down||Total No. of Investee Companies||No. of Exits|
|Riverside Australia Fund III||$350m||2019||Lower to Mid Market Expansion / Buyout||$10.0m||$8.47m||7|
|CPE Capital 9||$800m||2020||Mid Market Buyout||$30.0m||$9.53m||4|
|Adamantem Capital Fund II||$727m||2020||Mid Market Expansion / Buyout||$10.0m||$3.06m||4|
|Advent Partners Fund 3||$410m||2021||Lower to Mid Market Expansion / Buyout||$30.0m||-||1|
|Allegro Fund IV||$600m||2021||Mid Market Turnaround||$30.0m||$1.28m||1|
|Anchorage Capital Partners Fund IV||$500m||2022||Mid Market Special Situations & Turnaround||$30.0m||-||0|
|Potentia Capital Fund II||$635m||2022||Mid Market Buyout||$20.0m||$1.75m||1|
|Co-invest No.1 (Imaging Associates Group)||$52.0m||2021||Lower to Mid Market Growth Expansion||$2.0m||$2.05m||1|
|Co-invest No.2 (Gull New Zealand)||~$500m||2022||Mid Market Special Situations||$2.0m||$2.0m||1|
|Co-invest No.3 (EventsAir)||~$100m||2022||Lower to Mid Market Expansion / Buyout||$2.0m||$2.0m||1|
|Co-invest No.4 (Integrated Control Technology)||$25m||2022||Lower to Mid Market Expansion||$2.0m||$1.7m||1|
|Co-invest No.5 (Compare Club)||$110m||2022||Later Stage Expansion||$2.0m||$2.0m||1|
* target fund size
** Excluding Duplicates