Ex-CHAMP Ventures, Quadrant executives raise $211m fund

The formation of Odyssey Private Equity follows a decision by CHAMP Ventures not to pursue another fundraise. Earlier this year an agreement was reached that would see Gareth Banks, Jonathan Kelly and Paul Readdy retain their existing portfolio company board roles while giving them the option to consider raising capital under a new name.

Penklis co-founded Quadrant with Chris Hadley in 1996 and departed three years ago, but remained as an advisor within the industry.

Odyssey set out with a target of A$200 million but received a strong response from institutional investors that wanted exposure to Australia’s lower middle market space. The firm will write equity checks of A$15-40 million in private businesses with enterprise valuations of up to A$100 million, taking minority or majority positions. Larger opportunities will be addressed through co-investment from LPs.

“The formation of Odyssey was driven by a number of factors. The timing was right for the team, which has a solid performance track record. The market segment is attractive, with strong deal flow and a history of strong returns for investors. With private equity firms raising larger funds and moving out of the segment, we saw an opportunity and received strong investor support for the fund,” said Penklis.

Private equity fundraising for Australia and New Zealand-focused buyout vehicles is notoriously lumpy, with the amounts raised on an annual basis largely dependent on the number and type of managers in the market. However, the industry has seen a general increase in fund size over the last decade as GPs have evolved beyond their lower middle market roots.

Quadrant closed its eighth fund – and fifth as a fully independent entity – at A$980 million in August of last year. Having raised A$125 million for its third fund in 2001, two vintages later the firm was managing a A$500 million vehicle, rising to A$850 million for Fund VII. This has been driven in part by performance and in part by the economic situation and the PE opportunity in the region.

CHAMP Ventures closed its seventh fund at A$475 million in 2012. This compares to A$300 million and A$165 million, respectively, for the two previous vehicles.

After several years of relative inactivity, Australia has seen the emergence of a number of new GPs. Several of these are spin-outs, with Ben Gray, until recently the Australia-based co-head of TPG Capital’s Asia operation, is seeking to raise A$2 billion, while Anthony Kerwick and Rob Koczkar, formerly of Pacific Equity Partners, are said to be targeting A$600 million at Adamantem Capital.

Andrew Gray, who previously led technology investments at Archer Capital, is now pursuing a sector-focused strategy at Potentia, completing several transactions on a deal-by-deal basis ahead of a prospective fundraise this year. Executives from Ironbridge Capital and Catalyst Investment Managers are also taking a deal-by-deal approach to the middle market.

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• Topics
• Australasia
• Fundraising
• Buyout
• GPs
• Australia
• New Zealand
• Odyssey Private Capital
• Quadrant Private Equity
• CHAMP Ventures