Australia GP stakes investor Pacific Current gets buyout offer

Regal Partners, a listed alternatives manager with approximately AUD 5.8bn (USD 3.9bn) in funds under management, moved first. It submitted an offer at an implied value of AUD 10.77 per share, or a market capitalisation of AUD 555.4m, according to a filing. This prompted a surge in Pacific Current stock, which closed at AUD 10.31 on July 27, up 32%.

Under the Regal scheme of arrangement, Pacific Current shareholders would receive AUD 7.50 in cash and 2.2 shares in GQG Partners – an asset manager in which Pacific Current holds a stake – for each one of their shares. Alternatively, shareholders may substitute either one or both elements of the consideration for shares in Regal.

The prospective acquirer has also agreed to cooperate on the deal with River Capital, which owned 3.16% of Pacific Current as of September 2022. River Capital is an asset manager that serves family offices and high net worth individuals. It is best known in private equity for buying The Cheesecake Shop from PAG and trying to take the business global.

The Regal offer values GQG, which went public in Australia in 2021, at AUD 3.62 per share, a significant premium to the July 25 closing price of AUD 1.65. GQG responded by announcing it would submit its own non-binding offer for Pacific Current. Further details have yet to emerge. GQG has USD 104.1bn in funds under management also multiple public equity strategies.

Pacific Current describes itself as “a global multi-boutique asset management business committed to partnering with exceptional investment managers.” It currently has a portfolio of 16 managers in Australia, India, Luxembourg, the US, and the UK. They include Sydney-based fund-of-funds Roc Partners and Chicago’s Victory Park Capital.

Last month, Pacific Current sold its 16% interest in Proterra Investment Partners, a specialist private equity investor in food-related businesses, to Challenger Funds Management.

The firm had AUD 187.3bn in funds under management as of March, but more than three-quarters of that was GQG. For the 12 months ended June 2022, Pacific Current generated AUD 21.6m in revenue, up from AUD 20.1m a year earlier. Meanwhile, a net profit of AUD 17.7m turned into a loss of AUD 32.8m, largely due to changes in the fair value of financial assets and liabilities.

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• Topics
• Australasia
• Buyouts
• Financials
• Australia
• Pacific Current Group
• Financial Services