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VIDEO: Archer Capital's Greg Minton

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Australian fund managers need to go offshore to raise capital – but only if they are targeting large funds, says Greg Minton, managing director at Archer Capital. “In fund IV we got about A$740 million from the domestic market and about the same again for Fund IV, so the domestic LPs are there,” he says. “But if you want to raise a A$1.5 billion fund you need half of it to come from international investors”

Archer Capital closed its fifth fund at the end of last year on A$1.5 billion, having spent less than four months in the market. Its previous vehicle, raised in 2007, attracted A$1.36 billion in commitments. Overseas LPs accounted for two-thirds of Archer Capital Fund 5, compared to 55% of its predecessor.

According to Minton, the increase size between funds IV and V was entirely covered by foreign investors. However, given that Archer is comfortable with a mid-market vehicle of A$1.5 billion, he doesn't expect the balance to tilt any further.

One trend that is likely to become further ingrained is Australian trade sale exits to Asian strategic investors.

"When we sold MYOB it went to Bain Asia, when we sold iNova Pharmaceuticals [to Canada's Valeant Pharmaceuticals last year] there were a couple of Asian buyers interested," says Minton. "We have some assets today that we think would be attractive to Asian buyers. Being a country manager and looking to grow businesses in Asia, that's one of our ambitions."

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