Australia’s Anacacia reaches $129m second close

Anacacia has until September 2013 to complete fundraising but the A$25 million in available capacity is expected to be covered early in the year, predominantly by international LPs.

The private equity firm raised A$50 million for its 2007 vintage debut fund, almost exclusively from domestic investors. Australian superannuation and pension funds are prominent backers of Fund II with Anacacia taking up part of the small buyout allocation of these LPs' global private equity strategies.

International LPs account for a significant minority of the corpus, principally fund-of-funds, endowments and family offices. According to industry sources, two of the participants in the second close are institutional investors, each with more than $20 billion under management, that only maintain 2-3 relationships with local GPs, with a focus on the large end of the market.

"Every investor in Fund I that had capital available for private equity has re-upped," Jeremy Samuel, managing director at Anacacia, tells AVCJ. "We are very focused on having top tier investors in the fund and it's terrific to have reached these milestones."

Fund I has invested in eight management buyouts and completed five follow-on acquisitions. As of July, it had delivered a gross IRR of more than 50%. Last year Preqin ranked the vehicle as the outstanding performer globally out of funds raised between 2006 and 2008.

The new fund will follow a similar strategy to its predecessor - targeting Australia-based small- and medium-sized enterprises (SMEs) with revenues of A$20-100 million and positive earnings - although the larger corpus should allow for more deals in total. The plan is to make 12 investments over the 10-year life of the fund.

"There is a baby boomer generation that is dealing with succession issues and they are looking for exclusive relationships with private equity investors who can serve as partners, helping them manage the succession and keep some equity in the business," Samuel says.

Two companies remain in the portfolio of eight, although there have been several partial exits through dividend payments. Half of the returns in Fund I come from portfolio company dividends.

It emerged last month that Anacacia has agreed to sell baby-food producer Rafferty's Garden to H.J. Heinz, and submitted the transaction for review by the Australian Competition and Consumer Commission (ACCA). There is sufficient crossover between the two companies' businesses that the commission must rule on whether a merged entity would be in consumers' interests.

Anacacia completed the buyout of Rafferty's in 2010 alongside SalesLink Australasia.

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• Topics
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• Anacacia Capital
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