Australia's Quadrant closes mid-market fund at $863m

Quadrant Private Equity No.6 – the firm’s sixth fund as an independent entity but ninth overall – was substantially oversubscribed and commitments were sourced entirely from existing investors. The fund close was first reported by The Australian Financial Review and has since been confirmed by AVCJ.

Australia’s Future Fund and ROC Partners are among the local LPs, but 60% of the corpus comes from offshore investors, continuing a gradual shift in the balance. The split for Fund VIII and Fund VII was close to 50-50.

Quadrant typically targets companies with an enterprise value of A$100-500 million and commits A$70-150 million per investment. The firm has been disciplined on fund size in order to remain focused on a mid-market remit characterized by founder succession and industry consolidation plays. Fund VIII closed at A$980 million, while the two previous vehicles had corpuses of A$850 million and A$750 million, respectively.

At the same time, the velocity of deployment is increasing. The gap between the final closes for Fund VIII and Fund IX is around 16 months compared to 30 months for the previous cycle.

Many of the private equity firm’s investments fall under a handful of platforms. In Fund VIII, for example, numerous bolt-on acquisitions have been completed under the Experience Australia tourism business and gym operator Fitness & Lifestyle Group. Last month, Quadrant announced it would employ a similar strategy in the family and children’s entertainment market, acquiring Timezone Group as the first asset of The Entertainment & Education Group, which will focus on Asia as well as Australia.

In the absence of a strong IPO market, trade sales have become more prevalent in the firm’s portfolio. In July drinking water appliances manufacturer Zip Industries went to Culligan International, while cancer care specialist Icon Group and Real Pet Food both were both sold – at A$1 billion valuations – to consortiums keen on exploiting an Asian growth angle.

QIC, Goldman Sachs and China-focused Pagoda Investment bought Icon, which Quadrant turned into an integrated cancer business with more than 36 sites in four geographies, including Singapore and mainland China. Real Pet Food, already a global leader in the fresh chilled pet food space, was acquired by China-based food and agriculture-focused GP Hosen Capital in conjunction with New Hope Group and Temasek Holdings.

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• Topics
• Australasia
• Fundraising
• Buyout
• GPs
• Australia
• New Zealand
• Quadrant Private Equity
• Future Fund
• ROC Partners