Quadrant Private Equity has confirmed its status as one of Australia's most in-demand private equity managers, after it scaled back bids from some investors to raise a $980 million fund in record time. The Sydney-based private equity firm, which owns stakes in companies including hot and cold water taps business Zip Industries and restaurant roll-up Urban Purveyor Group, closed its eighth fund earlier this week after launching the raising in early July.
"We are delighted with the response from investors, many of whom have invested with us over multiple funds," Quadrant executive chairman Chris Hadley told The Australian Financial Review.
"Pleasingly every investor that performed due diligence has invested in the fund which is a huge credit to our team."
It's understood Australian and offshore private equity investors were left scrambling for allocations, as Quadrant capped the fund at $980 million despite significantly higher demand from investors. While plenty of superannuation and other private equity investors have been re-thinking the asset class in recent years because of its fee structure, Mr Hadley said the fund's investors were more focused on performance. Quadrant has already realised $3.2 billion in total proceeds for investors, from $1.2 billion cash invested, generating 2.7- times cash back at a gross internal rate of return of 36 per cent before fees. The numbers place it in the top quartile of private equity managers globally.
"Fees are a consideration but sophisticated limited partners focus on returns net of fees delivered consistently over multiple funds," he said.
Absolute return
"Importantly the long-term absolute return can provide a good balance for allocations to other perhaps more short-term market driven assets which
are subject to greater volatility. "Limited partners naturally assess and rank private equity managers on a global basis. Fortunately our funds have
consistently performed in the top quartile on a global basis, which allows us to have a short fund raise and focus on investing"
It is the eighth fund for Mr Hadley, a 25-year veteran of the industry, who leads the firm along with managing partners Marcus Darville and Justin Ryan, and partners Alex Eady and Jonathon Pearce. It means the busy dealmaker is cashed up and will be back in the market seeking fresh acquisition opportunities in coming months.
"Our performance is all about the team, we have a great bunch of talented, committed people who want to deliver for investors and who will continue to perform in the long term," Mr Hadley said.
Quadrant is best known in Australia for investments including IVF roll-up Virtus Health, vehicle parts business Burson Auto Parts (now Bapcor), fast food restaurant owner Quick Service Restaurants, out of home advertising business APN Outdoor and the now-listed aged care businesses Estia Health and Summerset.
As revealed by The Australian Financial Review's Street Talk column, investors were allowed into the data room in early July on an invitation-only basis.
(First published in The Australian Financial Review, 19 August 2016)
Writen by The Australian Financial Review, 19/08/2016 News