Australia’s Quadrant in $758m quick-fire fundraise

The private equity firm's previous fund took six weeks to reach a final close of A$750 million (then $746 million) in late 2010, exceeding the A$600 million target. Coming in 50% larger than Fund V, the sixth fund was the first Quadrant vehicle to include offshore investors.

Fund VII is expected to follow a similar strategy to that of its predecessors, investing in profitable businesses run by proven managers that have established positions in well-defined and expanding market segments. Quadrant typically targets companies with an enterprise value of A$100-500 million and commits A$70-150 million per investment, although this can be topped up by co-investors.

Australia private equity fundraising came to $800 million in 2013, half the previous year's total. However, the market is not particularly deep and none of the mid-market GPs closed funds during the period. Quadrant alone has already put 2014 well on course to beat the 2013 total.

The successful fundraise comes after a busy 12 months for the private equity firm, with three exits and four investments.

The full exit from fertility services provider Virtus Health via a A$339 million IPO - the largest PE-backed offering in Australia in two years - was the prelude to a flurry of the private equity activity in the public markets in 2013. Nine PE-backed offerings raised a record $2.5 billion, up from $156 million from three IPOs the previous year, and more are expected in 2014.

These reportedly include two Quadrant portfolio companies - Burson Auto Parts and media monitoring business iSentia.

"Virtus was one of the deals that helped kick off the IPO market again," Marcus Darville, a director at the PE firm, told AVCJ earlier this year. "I think it was a combination of the fact it was a healthcare business and so had good growth opportunities and then there was also a lot of demand because it was an unusual business. Demand was something like eight times covered."

Quadrant also completed its gradual sell-down of New Zealand retirement village operator Summerset in October 2013, generating an estimated return multiple of more than 3.7x, while Senior Money International's New Zealand and Australia home equity release mortgage business was sold to New Zealand's Heartland Bank.

On the investment front, Quadrant made another demographics play with the acquisition of a majority stake in Australian aged-care operator Estia Health, entered the pet supplies business through City Farmers, and agreed to buy partner APN News & Media's share in their outdoor advertising joint venture.

The final investment of 2013 was the acquisition of a majority stake in Zip Industries, an Australian developer of small-scale hot water systems capable of delivering boiling water instantly.

Minter Ellison served as fund formation counsel for Fund VI.

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• Topics
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• Australasia
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• Australia
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• Quadrant Private Equity