Australia's Five V sells GP stake

The announcement comes days after Five V closed its fourth fund with more than A$550 million ($398 million) in commitments, taking its total assets under management (AUM) to A$1.1 billion. The firm is unusual in a local context for relying heavily on high net worth individuals, founders, and family offices.

Pinnacle will invest A$65 million in Five V, plus a further A$10 million contingent on the firm closing its second venture capital fund. The investment comprises entirely new equity with neither of Five V’s principals, Adrian MacKenzie and Srdjan Dangubic, selling down their ownership positions.

The new capital will be used to support co-investments and to develop new business lines. Longer-term, it will also serve as a succession planning tool, helping form a baseline valuation when MacKenzie and Dangubic do sell equity to other members of the Five V investment management team.

“The primary capital investment in Five V will enable us to now invest our balance sheet alongside the significant team investment in our funds. This creates even greater alignment with our investors and with our management teams, founders and partners,” MacKenzie said in a statement.

“We see significant opportunities to invest and grow in our part of the market and this capital will allow us to further execute our strategy and make great investments. We also look forward to working together with the Pinnacle team on distribution and fund raisings in the future.”

MacKenzie and Dangubic worked together at CVC Capital Partners before forming Five V in 2016.

The firm has made 15 PE and 17 VC investments, to date, focusing on high growth, technology-enabled companies. PE activity is typically partnership deals with equity checks of A$30-100 million, while VC investments are Series A and B rounds for start-ups with product-market fit.

There have been seven full and partial exits to date – four trade sales, one IPO, and two sales to financial sponsors. They include apparel retailer Universal Store, B2B healthcare platform Unified Hospital Group, HR software provider Ascender, business process outsourcing player Probe CX, and education platform Education Perfect. On the VC side, Five V has previously backed unicorns like Canva and SiteMinder.

Universal Store, which listed in Australia, is fully exited with a 6x return. Another full exit was agreed last month when KKR took a majority stake in business process outsourcing player Probe CX, joining Quadrant Private Equity on the share register and taking out Five V, which will receive 4x its money. KKR also facilitated a partial exit from Education Perfect. The return is 10x.

Fund I, which had a corpus of A$11.5 million, comprised investments predating the creation of Five V. It has delivered a 10.3x multiple. Fund II closed on A$65 million in 2017 and has generated 4.4x.

Pinnacle will have exposure to Fund III – which closed in 2019 on A$250 million – Fund IV, and a debut VC fund of A$35 million. It will also have exposure to future funds raised by Five V, according to a presentation.

Fund III is fully vested, holding eight positions worth A$432 million. One realization is pending: research firm Zenith Investment Partners will be sold to UK-based FE fundinfo, bringing a 2.1x multiple and a 44% IRR. The first VC fund has deployed A$27 million, including co-investment.

Pinnacle had A$90.9 billion in AUM as of October across infrastructure, private and public credit, and public equities. Existing private capital managers include infrastructure investor Palisade Investment Partners and credit specialist Metrics, with AUM of A$2.6 billion and A$8.1 billion, respectively.

Five V represents the inaugural investment in the private equity and venture capital space. Overall private capital exposure will rise to A$11.8 billion, while the broader alternatives portfolio will hit A$38.3 billion.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Australasia
• GPs
• Investments
• Australia
• GPs
• Five V Capital