Co-founder steps back from Australia's Pacific Equity Partners

Investors were informed of the change at PEP’s annual general meeting in November. McCullagh, now 65, established the firm in 1998 with Rickard Gardell, Simon Pillar, and Tim Sims. He is the only one of the four not to come from a consulting background, having previously served as a managing director at Salomon Brothers Australia and as head of Australasia at Prudential Securities.

Investments led by McCullagh in recent years include Link Group, which PEP listed in October 2015 and fully exited the following September. The GP bought share registry Link Market Services in 2005 and completed several add-on acquisitions, notably fund administration services provider AAS. McCullagh was chairman of Link Group.

PEP has made more than 27 operating company investments and over 100 bolt-on acquisitions, typically targeting underperforming market-leading businesses in Australia and New Zealand with enterprise values of A$250 million to A$1.2 billion. The firm is currently investing its fifth fund, which closed at A$2.1 billion in September 2015.

Transactions announced in 2017 include iNova Pharmaceuticals and flour producer Allied Mills, which has been combined with another portfolio company, baked goods specialist Pinnacle. This was the fifth bolt-on acquisition for the Pinnacle platform. The aim is to create a bakery business that sells everything from bagels to the ingredients used to produce them.

PEP operates an apprenticeship model, usually hiring experienced graduates from consulting firms and investment banks and bringing them through the organization to build up a strong base of experience. It has approximately 30 investment professionals, of whom 11 are at managing director level.

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