Quadrant scales up Australia growth equity fund to $397m

The final close was first reported by The Australian Financial Review (AFR) and subsequently confirmed to AVCJ by a source close to the situation. There was around AUD 700m in demand for the fund, which will focus on high-growth companies that are open to external investment but do not want to cede control. Quadrant will acquire stakes of 10%-30% and have board representation.

Interest in the strategy was driven by three key trends, Chris Hadley, Quadrant’s executive chairman, told AFR: the continued rise of private capital; a reluctance among leading private companies to list domestically; and the growth of the mid-market segment. “The threshold to be a listed company gets higher, from a regulatory perspective as well as from an actual scale perspective,” he added.

Quadrant closed its 10th flagship buyout fund – and seventh as an independent manager – on AUD 1.24bn in 2020. A year later, it raised AUD 530m for a second small buyout vehicle, up from AUD 400m in the first vintage. That strategy was introduced to address opportunities that were being overlooked as Quadrant’s flagship funds became progressively larger.

The growth fund is expected to make 8-12 investments. The motivation is much like that behind the small buyout fund: Quadrant was seeing opportunities that didn’t fit into existing strategies and wanted to capitalise on these rather than passing on them or referring them to other investors.

Growth capital investment in Australia and New Zealand has expanded considerably in recent years. A total of USD 8.1bn was put to work in 2022, pushing the annual average for 2019-2022 to USD 4.8bn. This compares to an average of USD 1.5bn for the prior four years.

Much of the additional investment has gone into the technology sector, tracking significant growth in the software space, where local start-ups are increasingly targeting global customer bases. The sector received an average of USD 1.1bn between 2019 and 2022, up from USD 320m for 2015-2018.

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• Topics
• Australasia
• Fundraising
• Growth
• Technology
• Quadrant Private Equity
• Australia
• Fundraising