Quadrant raises $754m for Australia mid-market fund

The vehicle, Quadrant Private Equity No.5, was substantially oversubscribed and existing investors account for the bulk of the corpus. AVCJ understands that domestic LPs make up just over half the investor base in dollar terms. The GP only opened up to offshore LPs for its sixth fund in 2010, while the onshore-offshore split in Fund VII was 50-50. That vehicle closed at A$850 million despite pressure to go larger; the GP has previously observed that a genuine middle market strategy for Australia and New Zealand requires a fund no larger than A$1 billion.

The new fund 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 in a select number or cases this is topped up by co-investment.

Quadrant's recent activity indicates a continued appetite for healthcare, services and premium foods. Last month, the GP agreed to buy a stake in St Ives Home Care from the Royal Automobile Club of Western Australia. The Fund VII portfolio already includes Icon Cancer Care, VIP Petfoods, Superior Food Services, and Urban Purveyor Group, a restaurant chain operator completed the bolt-on acquisition of Fratelli Fresh earlier this year.

The fund's other asset, Canberra Data Centers, is on course for exit after Infratil and Commonwealth Superannuation Corp. (CSC) agreed to buy a majority stake in the business for A$784 million in May.

Quadrant is also expected to acquire Ironbridge Capital's remaining interest in Super A-Mart-Barbeques Galore, which would represent the continuation of a Fund VII deal. Ironbridge led the buyout of both groups in 2006 and then Quadrant came in four years ago, taking a 60% stake in the holding company and injecting additional capital and securing a new financing package. GIC Private exited via that transaction, while Ironbridge, Macquarie Group and Partners Group rolled over their interests.

The fundraise is the second in Australia's middle-market space this year. The Growth Fund received commitments of A$450 million for its third vehicle, having raised the first two under the Archer Growth banner. The firm focuses on the lower middle market, acquiring businesses in Australia and New Zealand with enterprise values of up to A$200 million.

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• Topics
• Australasia
• Fundraising
• Buyout
• Australia
• Quadrant Private Equity