Australia's Quadrant plans $215m growth fund

The new fund will be led by Justin Ryan, a managing partner at Quadrant, and will invest up to A$50 million ($35.8 million) for minority or control stakes, Chris Hadley, the firm's executive chairman, told AVCJ. It will let the GP target a different segment of the market than its most recent Australia and New Zealand vehicle, which closed in 2017 at A$1.15 billion and seeks buyouts of companies with an enterprise value of A$100-500 million.

Several of Quadrant’s peers in Australian private equity have introduced growth strategies to diversify their businesses: the CHAMP Group raised seven funds under the CHAMP Ventures banner, while Archer Capital raised two growth funds. CHAMP Ventures decided against raising another fund in 2016 and three executives spun out to form Odyssey Private Equity, while Archer Growth is now separated from the parent as The Growth Fund.

Australia’s lower middle market continues to present attractive investment opportunities for private equity players, but many of the country’s oldest managers have grown to the point that it does not make sense to pursue these investments from their main funds. Quadrant, for example, raised six funds between 1996 and 2010, with corpuses increasing in size from A$50 million to A$750 million. Growth vehicles can help GPs regain access to this part of the market.

A similar dynamic is playing out in China. CDH Investments, which is currently seeking $2.5 billion for its seventh flagship US dollar-denominated fund, closed its debut middle market vehicle at $800 million in 2017. PAG Asia Capital, a pan-Asian GP that is very active in China, launched a country-focused growth fund the same year.

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