VPEG5 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 VPEG5 develops its Private Equity portfolio over time, a summary of each underlying fund commitment and investment is provided below.
February 2022
VPEG5’s Investment Committee approve a $1 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.
September 2022
VPEG5’s Investment Committee approves a $1 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 VPEG5′s Current Private Equity Commitments:
| Private Equity Fund Name | Fund / Deal Size | Vintage Year | Investment Focus / Type | VPEG5 Commitment | Total No. of Investee Companies | No. of Exits |
|---|---|---|---|---|---|---|
| CPE Capital 9 | $729m | 2020 | Mid Market Buyout | $20.0m | 4 | |
| Advent Partners Fund 3 | $410m | 2021 | "Growth Capital, Later Stage Expansion & Buyout" | $20.0m | 1 | |
| Allegro Fund IV | $750m | 2021 | Mid Market Turnaround | $20.0m | 2 | |
| Anchorage Capital Partners Fund IV | *$500m | 2022 | Mid Market Expansion / Buyout | $20.0m | 3 | |
| Riverside Australia Fund IV | $450m | 2022 | "Growth Capital, Later Stage Expansion & Buyout" | $20.0m | - | |
| Adamantem Environmental Opportunities Fund | *$350m | 2022 | "Growth Capital, Later Stage Expansion & Buyout" | $20.0m | - | |
| Mercury Capital Fund Twenty2 | $1.0bn | 2022 | Mid Market Expansion / Buyout | $15.0m | 1 | |
| Next Capital Fund V | *$350m | 2022 | "Growth Capital, Later Stage Expansion & Buyout" | $20.0m | 1 | |
| Co-invest No.1 (Gull New Zealand) | ~$500m | 2022 | Mid Market Special Situations | $1.0m | 1 | |
| Co-investment No.2 (EventsAir) | $100m | 2022 | Later Stage Expansion | $1.0m | 1 | |
| Co-invest No. 3 (Compare Club) | $110m | 2022 | Later Stage Buyout | $1.0m | 1 | |
| $71m | 2023 | Later Stage Buyout | $1.0m | 1 | ||
| Totals | $159.0m | 15** |
* target fund size
** Excluding Duplicates
