CHAMP Ventures closes seventh fund at $483m

CHAMP Ventures Investments Trust No. 7 reached a first close of A$222 million in July of last year. MVision served as placement agent.

The new fund has a similar remit to its predecessor - a A$300 million vehicle that closed in 2006 - focusing on companies in Australia's lower mid-market. It will typically invest A$20-55 million in firms with enterprise valuations up to A$200 million, pursuing expansion capital, replacement capital and buyout opportunities.

Two investments have already been completed - fleet management company SG Fleet and specialist safety products and equipment retailer RSEA - and a third is expected this month.

The seventh fund also sees CHAMP Ventures significantly diversify its investor base: 25% of the corpus comes from Asian LPs, 20% from the US and 11% from Europe and Middle East, with the remainder from domestic sources. Previous funds have been overwhelmingly backed by domestic LPs.

Broken down by investor type, pension funds account for 40% of the capital, with 28% from fund-of-funds and 15% from sovereign wealth funds.

"We are delighted with the calibre and diversity of the limited partners in our seventh fund, particularly as the competition from emerging PE markets is growing," said Su-Ming Wong, chairman and CEO of CHAMP Ventures. "More than half of the fund commitments come from Asia, the US, Europe and the Middle East. This reflects both support for CHAMP Ventures and recognition of Australia's unique position in the thriving Asia Pacific region."

The successful fundraise comes at a time when Australian GPs are said to be finding it difficult to attract capital. This has led to fundraising cycles being extended or, in some cases, abandoned.

The difficulties are blamed on practical and strategic changes within the superannuation funds, traditionally the primary domestic source of capital for Australian GPs. Some superfunds have merged, others have stepped back from private equity due to concerns over fees, and still more are in the process of making their portfolios more global, at the expense of local funds.

Nevertheless, private equity firms with strong track records have been able to raise capital. In addition to CHAMP Ventures, Quadrant Private Equity closed its third fund in December 2010 at A$750 million while Archer Capital raised A$1.5 billion for its fifth fund, closing in December 2011.

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• Topics
• Australasia
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• Australia
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• CHAMP Ventures