Australia's PEP closes Fund VI at $1.8b
Pacific Equity Partners (PEP) has reached a final close on its sixth Australia and New Zealand-focused buyout fund at the hard cap of A$2.5 billion ($1.8 billion).
PEP is one of only two Australia-based private equity firms to have raised funds of more than A$2 billion. BGH Capital, which was established in 2017 by Ben Gray, formerly Asia co-head of TPG Capital, closed its debut fund at about A$2.6 billion last year.
Fund VI reached a first close of A$2 billion in May last year. LPs included New York State Teachers’ Retirement System and Luxembourg-based Brederode, which contributed about $142 million and $23 million, respectively.
The fund was launched at the start of 2019 on the back of several realizations from Fund V, including bakery business Allied Pinnacle, which was sold to Japanese strategic player Nisshin Foods in a deal said to be worth A$950 million. Nisshin said in February 2019 that it would pay A$574 million, excluding net debt.
This followed the sale of Manuka Health, a specialist in honey-based wellness and gourmet food products, in October 2018 to Malaysian conglomerate Hong Leong Group after a three-year holding period.
PEP closed Fund V at A$2.1 billion in September 2015. This was less than the A$4 billion raised for the previous fund in 2007, but that vehicle included A$1.3 billion in non-discretionary co-investment capital allocated to deals on a pro rata basis. For Fund V onwards, PEP switched to a discretionary model, working with a relatively small group of large institutional investors.
PEP now claims to be the largest private markets fund manager in Australasia with A$4.9 billion in assets under management. This includes at least A$600 million in commitments for a secure assets fund targeting companies that generate annuity income but also offer opportunities for traditional private equity-style operational improvement.
The firm has invested 32 companies via its various funds and supported more than 100 bolt-on acquisitions since inception in 1998. Areas of interest include industrial services, energy, consumer products, entertainment, big data, and financial services. Helping Australasian companies enter Asia or build out their existing Asian footprints is an important theme.
Jersey-based Ocorian acted as fund administrator in the closing of Fund VI.
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