Australia's BGH closes Fund II on $2.6b

The fund launched last autumn with a target of AUD 3bn. BGH told LPs in late November that it has received AUD 3bn in commitments towards a first close. AVCJ reported in January that the hard cap had been set at around AUD 3.5bn and a final close was anticipated before the end of the first quarter.

BGH closed its debut fund on AUD 2.6bn in 2018. This was the largest first-time fund raised for Australia and New Zealand and the second biggest overall.

Pacific Equity Partners (PEP) occupied top spot, having raised AUD 4bn for its fourth fund in 2007. However, this comprised AUD 2.7bn in core equity and AUD 1.3bn in non-discretionary co-investment capital. This structure was dropped in the subsequent vintage. BGH Capital Fund II has now supplanted it based on core equity.

LPs that have disclosed their participation in Fund II include Washington State Investment Board and San Francisco County & Employees’ Retirement System. Both are LPs in Fund I. BGH also secured support from the likes of AustralianSuper, GIC, Ontario Teachers’ Pension Plan (OTPP), and Canada Pension Plan Investment Board (CPPIB) for its debut vehicle.

The firm did not identify any Fund II investors in a statement. It said the LP base is similar to Fund I and features public and private pension funds, sovereign wealth funds, insurance companies, endowments, foundations, and family offices.

BGH was established by Ben Gray, formerly co-head of TPG Capital in Asia, his long-time colleague Simon Harle, and Robin Bishop, who was previously head of Australia and New Zealand at Macquarie Capital. There are more than 35 professionals overall – said to be one of the largest teams in the market – including a dedicated operations group.

BGH targets primarily mid-market investments, while maintaining the flexibility to execute large buyouts or smaller growth deals.

There are eight investments in Fund I: education services provider Navitas, primary healthcare business ForHealth, dentist clinic chain Abano Healthcare, cybersecurity rollup CyberCX, online travel agent TripADeal, cinema and theme park operator Village Roadshow, bakery business Laurent, and chicken processor Hazeldene’s.

“These market-leading businesses are performing well and are positioned to benefit strongly as the Australian and New Zealand economies recover from the impacts of COVID-19,” the statement added.

Several came despite pandemic-driven disruption. The Abano acquisition was abandoned under the material adverse change (MAC) clause and then revived several months later once conditions had stabilized. Village Roadshow was also delayed amid uncertainty, while TripADeal was placed in hibernation pending the resumption of international travel.

Fund I was marked at a multiple of 1.3x and 41.2% net IRR as of June 2021, according to Washington State.

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• Topics
• Australasia
• Fundraising
• Buyout
• GPs
• Australia
• New Zealand
• BGH Capital