MAY 2015 · Year 24 No 252

Private equity firm retains 57 per cent in year’s biggest float to date

Super funds back $200m life sciences venture fund

Research institute sees role for private equity in lower cost super

Image: Martu Indigenous rangers carry out a bush burn-off in Western

Australia. Analysis has shown an Indigenous on-country program to

provide social returns equivalent to twice its funding. Story page 22.

Australian Private Equity & Venture Capital Journal MAY 2015 · Year 24 No 252 | 2

CONTENTS

EDITOR’S LETTER

Budget hopes 3

NEWS

Research institute sees role for

private equity in lower cost super 7

Federal budget to include incentives

for innovative small businesses 13

UK study finds private equity-funded

SMEs outperform listed rivals 17

Sale and leaseback option for

investee’s real estate holdings 18

Asia-Pacific’s most active non-bank

lender recognised 18

Investor expected to retain stake if

baby goods business floats 19

NSW minister for innovation 19

NSW government backs

commercialisation project 20

New categories for growth

company awards 20

Pastoral lease operations up

for sale 20

Confused situation of taxation of

earn-outs to be addressed 21

INVESTMENT ACTIVITY

Asian regional firm to pay $640m for

entertainment business 7

Offer rejection unlikely to end interest

in listed company 8

Private equity firm acquires rail

tourism business 9

Private equity backs management

buyout of tax depreciation adviser 11

Solar panel installation business

acquired 12

New mid-market firm makes first

investment 12

Footwear retail chain a

‘complementary’ acquisition 14

Australian founded tech company

raises $10m in venture capital 15

Australian venture firm invests in

US medical technology 16

Bolt-on investment for online

learning business 16

New investment partnership takes

stake in lighting business 17

Emerging markets firm invests in

Indonesian financial services 17

Infrastructure managers to move to

full ownership of wind farm 17

NEW FUNDS & FUNDRAISING

Super funds back $200m life sciences

venture fund 5

PERFORMANCE

Private equity firm retains 57 per cent

in year’s biggest float to date 5

Sovereign wealth fund continues to

allocate to private equity 12

New style vehicle leasing business

successfully floated 14

Electronic mapping business

divested to global operator 16

Sale of New Zealand analytics

business results in successful exit 16

Venture-backed web services

start-up acquired 18

PEOPLE MOVES

Leading private equity firm makes

appointment 11

Super fund seeks investment team

member 19

Super fund appoints new head of

investments 20

Super fund chief executive stands

down 20

Institutional investor appoints new

chief executive 20

INVESTEE NEWS

Private equity investee proposes

merger with listed company 10

Healthcare software company

partners with UK business 19

INFORMAL VENTURE CAPITAL

Software boom boosting New

Zealand angel investing 15

COMING EVENTS

Coming Events 26

ShARES ChART

Shares Chart 27

FEATURES

INDIGENOUS PROGRAM DELIVERS SOCIAL RETURN 22

REARVIEW MIRROR 24

Australian Private Equity & Venture Capital Journal MAY 2015 · Year 24 No 252 | 3

AUSTRALIAN PRIVATE EQUITY & VENTURE CAPITAL JOURNAL

Owned and Published by

PRIVATE EQUITY MEDIA

PO BOX 510, Five Dock,

NSW 2040

P: 02 9712 1350

www.privateequitymedia.com.au

MANAGING EDITOR

Adrian Herbert

P: 02 9712 1350

M: 0407 226 142

E: adrian.herbert@

privateequitymedia.com.au

NATIONAL ADVERTISING

MANAGER

Philip Thomson

P: 02 9489 0033

M: 0419 757 211

E: pthomson@

marketingforesight.com.au

DESIGNER

Odette Boulton

Australian Private Equity &

Venture Capital Journal is an

Independent publication. The

Journal welcomes editorial

contributions. All opinions are

those of the authors. All material

copyright Australian Private

Equity & Venture Capital Journal

and individual authors.

ISSN number: 1038–4324

EDITOR’S LETTER

In the lead-up to the Coalition’s second

federal budget, Treasurer Joe Hockey has

talked about incentives for “innovative

small businesses”.

These incentives will no doubt be in the

form of tax or regulatory concessions rather

than grant programs. The incentives are also

expected to apply across the broad swathe of

small business rather than focusing on high

tech start-ups despite this area having the

greatest potential for generating economic

growth.

This is expected to be a budget with a

strong focus on political as well as economic

objectives.

Any concessions which improve the small

business environment will, however, be

welcome.

But Hockey talked about Israel’s success

in developing high tech start-ups with the

support of government investment when he

addressed a recent Australia Israel Chamber

of Commerce event.

He said the Israeli government

made targeted investments in the

commercialisation of promising new

technologies but the Australian government

had different ways of supporting innovation

and segued that into a plug for the recently

fixed-up R&D tax concessions.

Clearly concessions are more likely than

investment but even accepting that there is

a lot to be learned from Israel. For example

Israel offers sweeping tax concessions to

entice overseas technology businesses to

relocate there.

Of course, the most important concession

which the Australian government could

make for our industry would be to assure

overseas investors that all their investments in

Australian private equity will be taxed only in

their home countries.

That would greatly assist the next stage in

the private equity cycle, raising capital.

The last few years have taken the Australian

industry through a couple of stages in the

cycle. There was a long period in which firms

had to focus on operational improvements to

investee companies as opportunities for exits

were limited. Then the IPO window opened

enabling firms to profitably exit long held

businesses.

A number of firms with records of recent

successful exits are now turning attention

to fund raising. This is now an international

process and as such Australian firms need

to demonstrate how their strategies meet

overseas investors’ requirements for global

and regional exposure. Strategies may

involve investing in Australian businesses

with Asian regional growth prospects or in

local industry sectors that cannot be found

in less developed economies elsewhere in

the region.

The global investment market should,

however, be more receptive than it was

three or four years ago and a few substantial

fundraisings can be expected before the end

of the calendar year.

For smaller managers, opportunities for

fundraising have changed significantly over

recent years. The trend for local institutions

to allocate their private equity mandates

globally rather than locally is still continuing.

But with the exception of a few managers

with internationally impressive performance,

global fundraising is impractical. This makes

it essential that new local sources of funding

are identified.

The family offices sector is an obvious

target but family offices are unlikely to be

interested in making blind pool investments

in conventional private equity funds.

Choosing individual investments is more

likely to appeal to them. Consequently, deal

by deal investing is gathering momentum.

This is likely to be reinforced by growing

interest among local institutional investors

to include direct investments in their private

equity portfolios.

ADRIAN HERBERTManaging Editor, Australian Private Equity & Venture Capital Journal

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Australian Private Equity & Venture Capital Journal MAY 2015 · Year 24 No 252 | 5

PERFORMANCEPRIVATE EqUITy FIRM RETAINS 57 PER CENT IN yEAR’S BIGGEST FLOAT TO DATE

International private equity firm Bain

Capital retained all its shares in MYOB

Group (ASX: MYO) when the company

floated on the ASX on 1 May. At the

completion of the float Bain Capital held

57 per cent of the listed entity, down from

95 per cent.

MYOB senior management, including

chief executive Tim Reed, sold some of

their shares but retained a combined stake

of about 3 per cent. Reed retained about

1.14 per cent.

Bain Capital and management shares

are to be held in voluntary escrow until

financial results have been released for the

six months to the end of June 2016, unless

the shares trade for 20 days at 20 per cent

higher than the IPO price.

The IPO raised $833 million, the largest

float to date in 2015. A total of 228.3

million new shares were issued at $3.65

a share after a book-build which started

with an indicative price range of $3-$4 per

share. The $3.65 share price represented

16 times earnings before interest, tax,

depreciation and amortisation (EBITDA)

on an EBITDA to enterprise value basis.

The float gave MYOB a market

capitalisation of $2.13 billion and an

enterprise value of $2.56 billion.

Pro forma net debt as at 31 December

was $435 million.

The dividend yield is expected to be

around 3 per cent.

In its prospectus, MYOB said it was

the market leader in the Australian SME

software market by users and estimated

that its users comprised 60-65 per

cent of the market. In December it had

about 505,000 paying users including

over 116,000 cloud users with the cloud

segment showing strong growth.

Chief executive Reed said: “The company

has taken enormous strides in recent years

under the ownership of Bain Capital. We

have made significant investment into R&D

in the business to innovate and further

drive our leadership through our range of

cloud accounting solutions.”

Chairman of the company Justin Milne,

was appointed ahead of the IPO. Milne

is chairman of NetComm Wireless (ASX:

NTC) and a former group managing

director of Telstra’s BigPond broadband

and media businesses (now Telstra

Media).

MYOB’s financial adviser on the float

was Reunion Capital Partners. Citi,

Goldman Sachs, Merrill Lynch and UBS

were joint lead managers to the offer.

The MYOB float has faced an unusual

challenge with rival cloud-based small

business software services provider

XERO (ASX/ NZE: XRO) challenging its

customer numbers, especially its rate

of growth of cloud services customers.

MYOB co-founder Craig Winkler is a major

investor and a board member of New

Zealand-based XERO.

Formerly an ASX-listed company,

MYOB was acquired by Archer Capital

and US-based international fund-of-funds

manager HarbourVest Partners for about

$451 million in early 2009.

Archer and HarbourVest exited MYOB

with a sale to Bain Capital in mid-2011. The

value of that deal was undisclosed by is

believed to have been around $1.2 billion.

Bain Capital engineered a partial exit

of its investment in MYOB in late 2012

through the issue of $150 million worth of

subordinated 5-year notes. Holders of the

notes were able to subscribe to shares in

the IPO at a 2.5 per cent discount to the

retail price.

NEW FUNDS & FUNDRAISINGSUPER FUNDS BACk $200M LIFE SCIENCES VENTURE FUND

Brandon Capital Partners has raised

$200 million for a third Medical Research

Commercialisation Fund, the largest

specific life sciences venture fund to be

raised in Australia to date.

Investors in Medical Research

Commercialisation Fund 3 (MRCF3)

include MRCF2 investors Australian Super

and Statewide Super. They have been

joined as investors in the new fund by

HESTA Super, an investor in Brandon

funds, and HOSTPLUS Super.

MRCF3 is supported by more than 50

of Australia’s leading medical research

institutes and research hospitals. The

research organisations have committed

to provide access to their medical

discoveries and the expertise and

infrastructure to develop them.

About $50 million of the new fund is to

be used as seed capital to be invested in

20-30 very early stage biotech or medical

device technologies. The remaining

$150 million will used to support the

development of the most successful of

these, along with existing MRCF portfolio

companies, through to mid-stage

clinical trials. Additionally, under the new

structure, each of the superannuation

fund investors will have opportunities

to make much larger direct investments

– expected to be in tens of millions – in

the technologies which appear most

promising as they mature.

Principal executive of MRCF and

Brandon managing director Dr Chris

Nave said: “We believe there is significant

potential in Australian life sciences which

has always outperformed in terms of

research innovation but has fallen short

when it comes to commercialising those

discoveries. This failing has been largely

attributed to the lack of sufficient early

stage investment capital and access to

hands-on investment expertise to guide

the development and commercialisation

of these medical technologies. The

performance of the MRCF funds over the

past seven years demonstrates that its

unique investment model has overcome

these deficiencies.”

In addition to medical research institutes

and research hospitals, MRCF is supported

by the federal government and the

Queensland, NSW, Victoria, South Australia

and Western Australia state governments.

MRCF chairman, former Victorian

treasurer Alan Stockdale, said: “The

unique MRCF model is proving to be

highly successful. Last year’s acquisition

of Fibrotech Therapeutics, one of the

MRCF’s earliest investments by Shire Plc

was a landmark deal for the Australian

biotechnology sector. This eye-catching

acquisition was a validation of our

approach to effectively support medical

innovation in this country, leading to

benefits for patients, for the Australian

economy and returns for our investors.”

The first MRCF fund raised $11.1 million

in 2007; MRCF2 raised $40 million in 2011,

including $20 million provided by the now

closed federal government Innovation

Investment Fund (IIF) program.

Australian Private Equity & Venture Capital Journal MAY 2015 · Year 24 No 252 | 6

Brandon also raised the $50 million

Brandon Biosciences Fund 1 in 2008.

Some of the technologies in which these

funds invested have developed into the

most important Australian life sciences

companies of the last decade including

Fibrotech Therapeutics, Global Kinetics,

Osprey Medical (ASX: OSP), PolyActiva,

Spinifex Pharmaceuticals and Vaxxas.

Fibrotech Therapeutics developed drugs

for the treatment of kidney disease and

fibrosis. Global specialty pharmaceutical

company Shire plc (LSE: SHP, NASDAQ:

SHPG) paid an upfront $US75 million, plus

undisclosed contingent payments, for the

company last year (APE&VCJ, Jun 14).

Global Kinetics has developed a

wristwatch style data logging device

which records movements associated

with Parkinson’s disease. The device can

be used to assist in monitoring patients’

progress and the effectiveness of drugs

used to treat the disease.

Osprey Medical has developed a unique

heart catheter system which prevents

imaging contrast agents, used in in

cardiac interventions, from reaching the

kidneys where they can be highly toxic.

The company successfully listed on the

ASX in 2012 (APE&VCJ, May 12). Now

defunct venture capital firm CM Capital

was also an investor in Osprey Medical.

PolyActiva has developed intra-ocular

implants to treat glaucoma and severe

eye infections as well as a product to treat

osteoarthritis. Brandon Biosciences Fund

is also an investor in PolyActiva.

Spinifex Pharmaceuticals has made

significant progress in developing drugs

for the relief of chronic pain. The company

attracted $US45 million in investment

from leading global biotechnology

investors Novo A/S and Canaan Partners

last year (APE&VCJ, Jun 14).

Vaxxas is commercialising its

proprietary Nanopatch needle-free

vaccination technology. The Nanopatch is

covered with an array of tiny projections

too small to be visible to the naked

eye but sharp enough to penetrate

the skin and deliver vaccine to the

abundant immune cell population just

below. Preclinical tests have shown the

technology to require far lower dosages

than conventional needle injections. The

patches can also be dry coated with

vaccine making refrigeration unnecessary,

Australian Private Equity & Venture Capital Journal MAY 2015 · Year 24 No 252 | 7

an important advantage in delivering

vaccines in tropical regions.

Sydney venture capital firm OneVentures

led a $25 million first closing of a Series

B funding round for Vaxxas recently

(APE&VCJ, Mar 15). US-based HealthCare

Ventures is also an investor in the company

along with Brandon Capital.

NEWSRESEARCH INSTITUTE SEES ROLE FOR PRIVATE EqUITy IN LOWER COST SUPER

A new report from the Grattan Institute

argues that if the federal government

were to act on “excessive fees” charged

by superannuation funds, the retirement

benefits of young people beginning super

accounts today could be increased by at

least $40,000.

Super Savings, follows up on the

institute’s 2014 report, Super Sting.

The new report finds that many

superannuation account holders are paying

too much in both administration and

investment management fees and that the

system could be run for significantly less

than the $21 billion Australians currently

pay each year in fees and expenses.

The report recommends that the

government run a tender to select

superannuation funds to manage the

accounts of more than nine million

Australians who chose a default fund

through their employer.

Running a tender to select these funds

would save $1 billion a year in fees, which

would flow through to increased account

balances.

The new report maintains that reducing

administration costs of the superannuation

system is the key to increasing retirement

benefits. But it notes that higher fee-higher

return asset classes such as private equity

and venture capital could be included in

the investment mix of funds, including

default funds selected by the tender

process.

The report says: “Any tender process

should give substantial weight to fees and

costs. Grattan’s 2014 Super Sting report

proposes that the tender be a fee-based

auction, since that would suit listed asset

classes in which low-cost, less active

investment styles are likely to perform

better than other approaches over the

long run.

“For some other asset classes, fees

remain important, but selection based

purely on fees may not give investment

managers sufficient incentive to perform.

These classes, which include unlisted

infrastructure, property, private equity

and venture capital, comprise about 20

per cent of fund portfolios. Instead of

a fee-based tender for these classes,

government could give weight in its

selection criteria to past performance net

of fees and to modelling of prospective

future net returns. It could also restrict

participation to funds that have

substantial continuing businesses in those

asset classes.

“Government will also need to ensure

that winners are not the funds that

best hide costs. Expert advice on how

to make products comparable will be

required. Investment products can

be difficult to compare but it can be

done, and governments, businesses

and superannuation funds already do it

satisfactorily.”

The Murray Financial Systems Inquiry

similarly recommended introduction of a

“competitive mechanism” to select default

funds unless a review shows that the

sector has become much more efficient

by 2020. The Grattan report argues that

the government should accelerate this

timetable.

Super Savings says the government

should follow through on recent moves

to reduce administration costs and make

default accounts more transparent.

The government should also go further

to consolidate fund members’ excess

accounts, merge funds and encourage

people to move out of overpriced

superannuation products.

“There are too many accounts, too

many funds and too many of them incur

high costs,” says the report’s author

Grattan’s productivity growth program

director Jim Minifie.

“Australia has many high-performing but

lean funds. If other funds charged what

they charge, account holders could get

the same performance, but pay $4 billion

a year less in administration and $2 billion

less in investment management,” he says.

“A stronger and fairer superannuation

system will take the pressure off

government pension payments and give

older Australians confidence in the future.”

Asked about the Grattan Institute’s

views of the role of alternative assets such

as private equity and venture capital in

superannuation fund investment, Minifie

said that the institute had been criticised

for taking a “broad brush approach to

asset allocation” in the Super Sting report

which had suggested superannuation

funds should focus on listed investments to

simplify fee structures.

The new report, however, had accepted

that higher fee alternative investments

included in the investment programs

of the more efficiently managed

superannuation funds, could have roles to

play in future investment strategies but

funds’ total asset management fees would

have to remain low.

INVESTMENT ACTIVITyASIAN REGIONAL FIRM TO PAy $640M FOR ENTERTAINMENT BUSINESS

Asian region private equity firm Affinity

Equity Partners is to buy the Nine Live

business from Nine Entertainment Co

(NEC) for an enterprise value of $640

million.

Affinity is expected to rename the

business and expand its activities into Asia.

Nine Live, which was established in

2011, is the television company’s live

entertainment, sport and events business.

The business includes

Ticketek, Australia’s largest sports and

entertainment ticketing company.

Australia and New Zealand head of

Affinity, Brett Sutton, said the firm was

excited to be investing in Australia’s

leading live events and ticketing company.

“Nine Live is an excellent company

with strong management and has the

capacity for significant growth throughout

the region, which aligns with Affinity’s

investment strategy,” Sutton said. “Affinity

looks forward to partnering with Nine Live

to explore opportunities for expansion

while maintaining Nine Live’s outstanding

track record of customer service.”

Nine said the transaction represented an

attractive valuation from its point of view.

Nine said it had been able to include

in the deal contractual arrangements

Australian Private Equity & Venture Capital Journal MAY 2015 · Year 24 No 252 | 8

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which would preserve commercial

relationships and benefits which from

its owner ship of Nine Live and it looked

forward to continuing to work with

the business in areas where there were

mutual benefits.

In its 2014 financial year results, Nine

Entertainment said Nine Live achieved

earnings before interest, tax, depreciation

and amortisation (EBITDA) of $68 million,

up 19 per cent on the prior year. This

was on revenue of $228 million, up 36

per cent. Revenue was 16 per cent above

forecast predominantly driven by Nine

Touring and Events which had staged

successful One Direction, Keith Urban and

Ricky Martin tours.

Ticketek, which accounted for the

majority of Nine Live’s revenues, delivered

a 7 per cent increase in ticket sales

volumes for the year, coupled with a

2.5 per cent increase in average revenue

per ticket.

In the first half of the current financial

year, Nine Live’s EBITDA revenue was

down 10 per cent to $36 million but

in February the business said it still

expected to report EBITDA growth for

the full financial year primarily flowing

from an improved line-up of shows in the

second half.

Nine chief executive David Gyngell said

Nine Live had grown strongly under Nine’s

ownership over the last eight years. Under

the leadership of Geoff Jones, its team

had done “a remarkable job expanding

the business into Touring and Events and,

more recently, into international sports and

exhibitions”.

Nine said it was selling Nine Live to focus

on free to air television plus digital and

subscription streaming.

Affinity has investments in a number of

businesses which could have synergies

with Nine Live. These include a 35 per

cent stake Virgin Australia’s frequent flyer

program of Virgin Australia (ASX: VAH)

which it acquired last year (APE&VCJ, Sept

14) and South Korean record label LOEN

Entertainment.

King Wood and Mallesons advised

Affinity on the Nine Live acquisition.

INVESTMENT ACTIVITyOFFER REjECTION UNLIkELy TO END INTEREST IN LISTED COMPANy

The swift rejection by Bradken Limited

(ASX: BKN) of a $427 million leveraged

acquisition offer from Koch Industries and

Pacific Equity Partners (PEP) is unlikely to

end private equity interest in the troubled

heavy engineering business.

The bid offered $2.50 cash per share

by way of a scheme of arrangement and,

according to Bradken, was subject to a

number of conditions including “certain

financial due diligence”.

The unsolicited offer was received

on 1 April and Bradken announced its

rejection the following day. Bradken said

its board had considered the proposal and

“determined that it does not represent fair

value and accordingly determined not to

engage further”.

PEP is Australia’s largest private equity

firm and generally targets businesses

with enterprise values of $500 million to

Australian Private Equity & Venture Capital Journal MAY 2015 · Year 24 No 252 | 9

$1 billion. Koch Industries Inc. is one of the

largest private companies in the US and

is involved in a wide range of industries

as well as investment. The company had

been rumoured to be interested in making

mining industry investments in Australia for

several years.

The Bradken acquisition proposal

is believed to represent equal equity

investment between PEP and Koch

Industries.

Debt funding for the acquisition has

been arranged with a syndicate of lenders

from the Australian banking market

including JP Morgan and is on a committed

basis, according to S&P Capital IQ.

Nomura acted as financial adviser to PEP

and Greenhill to Koch Industries. Rothschild

and Bank of America Merrill Lynch acted as

financial adviser to Bradken.

While shareholders are likely to support

Bradken’s view that an offer of $2.50 a

share was too low some may question

why the company decided to cut off

further engagement rather than seeking a

higher offer.

As a result of the continuing downward

trend in demand for mineral resources

and for its products, Bradken has lost

considerable support since late last year

when its shares were trading above $4.

In March, international funds

management firm BlackRock, which in

the first half of 2014 had held more than

10.2 million shares, sold down its stake in

Bradken and ceased to be a substantial

shareholder. National Australia Bank

(ASX: NAB), which in the first half of 2014

had held 10.7 million shares, and global

asset management company Legg Mason

had ceased to be substantial shareholders

in February.

Bradken shares were trading as low as

$1.85 in late March before rumours of a

new offer sent them up to peak at $2.35

after the offer was confirmed.

PEP and Bain Capital Asia spent months

working with Bradken on an acquisition

proposal during the latter part of 2014.

Bradken finally announced on 5 December

that it had received a $5.10 per share

indicative offer. But in that announcement

the company also stated that it had

received a $6 per share indicative offer

from the private equity firms in August.

The board had granted due diligence then

but no firm offer had resulted.

On 28 January, Bradken announced

bid discussions had ended because

“recent volatility in global commodity and

financing markets had impacted on the

consortium’s ability to obtain financing”

on acceptable terms. This was despite

the consortium concluding confirmatory

due diligence to its satisfaction, according

to Bradken.

Newcastle-based Bradken supplies cast

and fabricated products internationally to

resources, energy and freight industries.

The company employs almost 4,600

people across manufacturing and sales

facilities in Australia, New Zealand, US,

Canada, UK, Indonesia, Malaysia, South

Africa, South America and China.

Prior to its listing on the ASX in August

2004, Bradken had for three years been

an investee of a consortium led by CHAMP

Private Equity.

Bradken shares closed at $2.38 on 1 May.

INVESTMENT ACTIVITyPRIVATE EqUITy FIRM ACqUIRES RAIL TOURISM BUSINESS

Allegro Funds has acquired Great Southern

Rail from UK-based international service

company Serco Group plc (LSE: SRP).

Serco announced in November that it

would dispose of businesses identified as

non-core to its future strategy of focusing

on services to governments.

Great Southern Rail operates The Indian

Pacific, The Ghan and The Overland rail

services.

The Indian Pacific, which runs between

Perth and Sydney, and The Ghan, which

runs between Adelaide and Darwin, are

considered to be two of the world’s great

rail journeys and attract Australian and

overseas tourists seeking unique rail travel

experiences. The Overland is a daytime

service between Melbourne and Adelaide.

Assets of Great Southern Rail include

rolling stock and other equipment required

to operate its trains but not the locomotives

which are leased as required. The business

also leases sidings for its rolling stock and

operating premises.

Allegro partner Adrian Loader took a trip

on The Ghan as part of the due diligence

process and came away convinced there

was strong value in Great Southern Rail

as a tourism brand. It was, he said, a

business which was in the process of being

transformed from a transport service to

a tourism experience but which still had

significant additional tourism potential to

be realised.

The business was profitable and growing

but Serco had identified it as outside its

focus of providing services to governments

such as commuter transport systems and

gaols. He declined to specify the value

of the deal but said it was “well under

$20 million” and much less than the

replacement cost of the assets.

Allegro has acquired 94 per cent of the

business with senior management taking

the remaining 6 per cent.

Loader said trips on The Indian Pacific

and The Ghan had particular appeal among

the over 55 age group – people who

would enjoy seeing the countryside from

the comfort of luxury rail compartments,

stopping to explore and get a bit of red

dust on them and then return to the train

for an elegant dinner.

He said Australians currently made up

85 per cent of travellers on The Ghan and

75 per cent of those on The Indian Pacific.

Both local and overseas markets had

potential for growth with a lower Australian

dollar making trips more affordable for

overseas visitors while at the same time

encouraging Australians to consider

holiday experiences at home. He said trips

on the Indian Pacific and The Ghan were

competing in the same market as ocean

cruises.

The Overland provides a once a week

daytime service between Melbourne and

Adelaide and does not offer similar tourism

potential, Loader conceded, but a review

of the entire business would examine what

could be done to increase demand for that

service as well.

Loader said Great Southern Rail was

growing with overall sales currently 15

per cent up year on year and 80 per cent

of tickets for the current calendar year

already sold.

Announcing the sale, Serco group chief

executive Rupert Soames said: “Great

Southern Rail is an iconic and award-

winning Australian tourism business

operated by some great people however

Serco needs to concentrate on its core as a

leading supplier of public services and we

cannot provide the focus and investment

Great Southern Rail needs to thrive.”

Australian Private Equity & Venture Capital Journal MAY 2015 · Year 24 No 252 | 10

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THE fIRST PROfESSIONAL PRAcTISE gUIDE SPEcIfIcALLY fOR THE AUSTRALIAN PRIVATE EQUITY INDUSTRY IS NOw AVAILABLE DIREcTLY fROm PRIVATE EQUITY mEDIA.

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INVESTEE NEWSPRIVATE EqUITy INVESTEE PROPOSES MERGER WITH LISTED COMPANy

Advent Private Capital investee company

Orionstone has proposed a nil-premium

merger with Emeco Holdings (ASX: EHL).

The two companies are competitors in

the mining equipment rental space.

Mackay, north Queensland-based

Orionstone announced the bid on 8 April

saying it would create one of Australia’s

top five equipment rental companies

and would benefit shareholders of both

businesses.

According to Orionstone, the transaction

would be expected to generate $34 million

in cost savings and would diversify the

overall revenue profile. Orionstone has

proposed retaining Emeco’s ASX listing.

Orionstone managing director Ashley

Fraser said: “The combination of Emeco

and Orionstone would create a stronger

and more diverse business by industry,

commodity and client. Together we would

draw on the complementary assets and

collective expertise of both companies’

management and employees to provide

customers with a broader suite of assets

and an enhanced service offering.”

Perth-based Emeco reported the bid in

an ASX announcement on 8 April noting it

had been received the previous day.

Emeco said: “A number of the elements

of the Orionstone proposal are incomplete

including not having funding in place to

effect the transaction. Accordingly, there is

no certainty that the Orionstone proposal

will lead to a transaction.”

On 29 April, Emeco reported that it

had “entered into active discussions with

Orionstone to assess the benefits of a

potential transaction” and would make

an announcement in the event of any

material developments.

Emeco retained Macquarie Capital to

advise on the proposal.

In February, Emeco reported an

operating net profit after tax (NPAT)

loss of $49.6 million for the six months

to the end of December. Earnings before

interest, tax, depreciation and amortisation

(EBITDA) for the period were $16.2 million

Australian Private Equity & Venture Capital Journal MAY 2015 · Year 24 No 252 | 11

compared with $36.9 million in the prior

corresponding period. The reduction in

earnings was impacted by one-off costs

and the use of operating leases to manage

capital expenditure, the company said. But

Emeco also reported that utilisation of its

equipment had improved over the period

from 50 per cent to 75 per cent.

In March, Emeco reported it was

diversifying into rental services to the

road haulage sector with the purchase of

Rentco Transport Equipment Rentals. The

acquisition was based on an equity value

for the business of $53 million and an

enterprise value of $82 million.

Emeco said Rentco generated revenue

of $45 million in the 2014 financial year

and EBITDA of $19 million. The acquisition

would be immediately earnings-per-share

accretive.

Hong Kong-based Black Crane Asia

Opportunities Fund became a substantial

shareholder in Emeco in March quickly

building up a stake of almost 7 per cent.

On 30 April, Emeco released its third

quarter operational update which reported

revenue of $67 million, up 6 per cent

on the prior corresponding period and

8 per cent up on the second quarter.

The company also reported group-wide

equipment utilisation of 73 per cent an

improvement over the prior corresponding

period.

Advent invested $68 million in Orionstone

in late 2011 for an unspecified stake.

The company is a major player in the

heavy earthmoving equipment rental

market. Most of Orionstone’s customers

are open cut mining operators and mining

contractors but it also has customers in

the construction industry and quarrying.

Orionstone’s proposal had little effect

on the share price of Emeco. After a brief

minor recovery in early April the shares

continued to fall and closed at 9.7 cents on

14 April. They had been trading around 18

cents in early January. The shares closed at

10 cents on 1 May.

PEOPLE MOVESLEADING PRIVATE EqUITy FIRM MAkES APPOINTMENT

Former CVC Capital Partners managing

director Graham Brooke is to join CHAMP

Private Equity later this year.

CHAMP said Brooke, who will be based

in the firm’s Sydney office, will add

experience to the senior team and the

firm’s global private equity capabilities.

Brooke spent five years working for

CVC in Australia before returning to

CVC’s London office in 2013. He left CVC

last year.

Australia’s second largest private

equity firm behind Pacific Equity

Partners, CHAMP has made seven

investments from its $1.5 billion, 2009

vintage, CHAMP III fund. The firm is

expected to raise a new fund this year.

INVESTMENT ACTIVITyPRIVATE EqUITy BACkS MANAGEMENT BUyOUT OF TAx DEPRECIATION ADVISOR

New private equity manager Yorkway

Equity Partners (YEP) has linked with

CHAMP Ventures to back a management

buyout of tax depreciation advice business

BMT Tax Depreciation.

YEP and CHAMP Ventures have jointly

taken a 65 per cent stake in the business

with chief executive Bradley Beer and

other members of senior management

holding the remaining 35 per cent.

The deal was originated by YEP

managing director Marcus Lim. YEP, which

was formed last year, is an associate of

corporate advisory and investment firm

Yorkway Partners.

YEP and CHAMP Ventures’ investment

enabled BMT founders Tom Plenty and

Brendan Farrugia, who were majority

shareholders and non-executive directors,

to sell out of the business. they set up in

Newcastle in 1997.

CHAMP Ventures executive director

Greg Smith is to become chairman of

BMT with YEP managing director Marcus

Lim and principal Michelene Hart also

becoming non-executive directors.

Hart said that in discussions with Beer,

Yorkway had identified a number of

growth opportunities for BMT and it now

planned to work with CHAMP Ventures to

support the management team to rapidly

expand the business.

BMT was established in Newcastle in

1997 and now operates Australia-wide with

additional offices in Sydney, Parramatta,

Melbourne, Brisbane, Adelaide, Perth, the

Gold Coast, Cairns, Canberra, Hobart

and Darwin.

The business is the national leader in

the preparation of post-construction

cost depreciation schedules for property

investors and their advisers. BMT

prepares schedules that enable investors

to accurately claim depreciation on

investment properties in their tax returns.

According to BMT, minimum depreciation

of $5,000 can be claimed in the first year

on a new residential investment property.

Beer said he was delighted to have

such highly credentialed and experienced

investors supporting the company.

“The simple focus will be on the growth

of the business both organically and

by acquisition. Our plan is to broaden

the services we provide to the property

investment community,” he said.

Beer said that BMT had focused on

depreciation schedule preparation to date

but it had identified other adjacent areas

in which property investors could benefit

from advisory services. He said individual

investors in particular were typically in

need of additional but there were also

opportunities to provide professional

advice to larger investors as well including

property trusts.

Yorkway Partners principal Paul

Batchelor said his firm had joined with

Marcus Lim last year backing a belief

that there was demand for deal-by-deal

investing in private companies from high

net worth investors. He said the success

in drawing together a strong investment

consortium for this first deal backed up

that belief.

In line with its established business

model, the principals of Yorkway had

invested as part of the YEP consortium.

Lim said: “We are delighted with

our investment in BMT, a market

leader in the taxation depreciation

schedule market with a strong focus

on customer service. We are backing

a strong management team which has

an excellent track record in growing the

tax depreciation schedule business. We

believe the business has excellent growth

prospects, leveraging its skills, processes

and key relationships.”

He said YEP had identified two separate

areas in which it expected to operate in

future, putting together syndicates of

high net worth individual investors to

Australian Private Equity & Venture Capital Journal MAY 2015 · Year 24 No 252 | 12

invest in opportunities that it originated

in the $3 million to $10 million range and

arranging investment in larger deals which

might be originated by Yorkway or other

advisers. In either area, YEP planned to

operate deal by deal as investors had

shown a strong preference for this style

of investment, at least with a new private

equity firm.

Lim said the firm had so far attracted

interest from high net worth individual

investors, family offices and one

institutional investor although the

institutional investor had not invested in

the BMT deal.

Family offices, he said, were a promising

source of investment capital but they

typically had their own preferences for

investment targets and styles of investment

so it was important to understand them

well before pitching deals.

INVESTMENT ACTIVITySOLAR PANEL INSTALLATION BUSINESS ACqUIRED

Anchorage Capital Partners has acquired

solar panel installation business Mark

Group Australia Pty Ltd (MGA).

The business became available for

sale following a restructure of the family

ownership of Mark Group United Kingdom

which established MGA as a wholly owned

subsidiary in 2009.

No financial details of the transaction

have been disclosed.

According to Anchorage, MGA is a

market leader in solar voltaic installations

with operations across Australia. The

business employs 104 staff and has

arrangements with 52 sub-contractors.

Anchorage founder and managing

director Phil Cave said: “MGA operates a

strong platform within the solar installation

sector with an established national

footprint and a reputation for high quality

service and products. With the current

focus on renewable energy sources and

energy efficiency, we see significant

opportunity in the business for sustainable

earnings improvement.”

Current chairman of MGA, Robert Grant,

is to remain with the business as chief

executive.

Anchorage will be represented on the

MGA board by Cave as chairman and

managing director Callen O’Brien as a non-

executive director.

Anchorage Capital Partners II fund raised

$250 million in 2013. The firm has a total of

about $450 million in committed funds.

Mark Group United Kingdom was

established in 1974. MGA was the

company’s first venture outside the

UK and was followed in 2010 with the

establishment of a North America business

headquartered in Philadelphia. In 2011,

Mark Group United Kingdom acquired New

Zealand business Right House from utility

provider Meridian Energy.

Wellington-based Right House went into

liquidation in February this year with 133

workers laid off around New Zealand. The

company had recorded an after-tax loss

of $NZ2.9 million in the year to March 31,

2014.

Liquidator PricewaterhouseCoopers was

at last reports close to selling the insulation

operations of Right House which employ

45 people around New Zealand.

Mark Group United Kingdom had been

seeking to sell the entire Right House

business but the company was put into

liquidation after a deal fell through.

INVESTMENT ACTIVITyNEW MID-MARkET FIRM MAkES FIRST INVESTMENT

Former CVC Asia-Pacific managing

director Adrian Mackenzie has joined with

ex-Archer Capital partners Andrew Gray

and Rishabh Mehrotra to set up a new mid-

market private equity firm.

The new firm, 5Value Capital Partners,

has made its first investment acquiring

the human resources managed services

(HRMS) business of Australian-based

recruitment company Talent2 which is

to continue to trade under the Talent2

name. The rest of Talent2 has just been

acquired by US-based international

recruitment business Allegis Group with

which it had worked first in partnership

and then in a joint venture over the last

four years.

Mackenzie launched his own

investment company 5V Capital last

year to invest in mature and growth

companies. To date 5V Capital’s

investments have been early stage and

growth ventures including MySale/

OzSale, Shop Reply, ParcelPoint, SMI,

SiteMinder, Viocorp, Canva, ImageBrief,

biNu, ROKT, Vend and CAIS.

5Value Capital Partners (5VCP) is

expected to make further investments

recruiting investors on a deal-by-deal

basis rather than by raising a conventional

private equity blind-pool fund.

Andrew Gray joined Archer in 2007

and led the acquisition and divestment

(to Bain Capital) of small business

software company MYOB. He also led

the acquisition of V8 Supercars. He left

Archer at the end of 2013.

Prior to joining Archer, Gray led the

European activities of US private equity

firm Francisco Partners. While with

Francisco Partners, he led acquisitions

of Brisbane-based mining software

company Mincom and of the law firms

billing software division of Solution6,

which was renamed Aderant. Solution6

later became MYOB.

Rishabh Mehrotra joined Archer in

2013 and served as chairman of V8

Supercars. He left the firm late last year.

Prior to joining Archer, Mehrotra was

chief executive chief executive of US

health management software company

SHPS Inc.

PERFORMANCESOVEREIGN WEALTH FUND CONTINUES TO ALLOCATE TO PRIVATE EqUITy

The $117 billion Future Fund’s allocation to

global private equity increased marginally

over the three months to the end of March

rising form 9.5 per cent to 9.6 per cent.

This was an increase of 0.867 billion,

from 10.403 billion to $11.274 billion.

The small percentage increase was to

be expected following a large, 1.8 per

cent, increase over the 2014 calendar year

which took the fund above its stated long-

term target of 9 per cent for the asset

class. The fund’s opportunistic investment

strategy does, however, allow for long-

term targets to be exceeded over the

short term.

The fund continued last year’s reduction

in exposure to listed equities with a

further reduction from 39.1 per cent to

38.5 per cent over the first three months

of this year.

Australian Private Equity & Venture Capital Journal MAY 2015 · Year 24 No 252 | 13

Allocations to cash were increased from

12.8 per cent to 15.2 per cent reflecting

the fund’s view that values in many asset

classes are currently high.

Infrastructure and property investments

were reduced from 7.4 per cent to 6.8

per cent.

Debt securities were reduced form 10.8

per cent to 9.9 per cent.

Alternative assets investments, mainly

in hedge funds, were reduced from 14 per

cent to 13.7 per cent.

Allocations to property were reduced

from 6.3 per cent to 6.2 per cent.

The fund reported an annualised return

of 7.1 per cent for the first quarter of the

calendar year, well ahead of the target of

1.5 per cent.

Managing director David Neal said

strong returns had been achieved from

all asset classes but warned that the

high returns of recent years could not be

expected to continue.

“We are conscious that prospective

returns cannot be expected to match

the returns generated over recent years

and we will continue our practice of only

taking risk when we believe it will be

appropriately rewarded,” he said.

“We are closely monitoring the

economic policy and political drivers at

play globally and will continue to adjust

the portfolio with the aim of generating

good returns in stronger markets while

providing some risk mitigation in weaker

periods.”

Chairman Peter Costello said the

nine-year-old fund’s patient and

disciplined approach to investing for

the long-term had delivered well to date.

But he continued: “Given the

enormous monetary stimulus around

the world, asset prices are generally

fully priced and in some cases over-

priced. We remain focused on achieving

the return target while avoiding excessive

risk and this is particularly important

as policy makers globally adjust

settings with a view to delivering

sustainable growth.”

NEWSFEDERAL BUDGET TO INCLUDE INCENTIVES FOR INNOVATIVE SMALL BUSINESSES

Federal treasurer Joe Hockey has

said incentives for “innovative small

businesses” will be included in this

month’s budget.

Speaking at an Australia Israel Chamber

of Commerce event in Melbourne on 22

April, Hockey said government spending

must deliver long-term benefits for the

community including help for small and

micro businesses.

Turning to the budget he said: “One of

the main groups of beneficiaries will be

innovative small businesses”.

“In that regard we have learnt a few

lessons from Israel.

“As you know, Israel is home to more

start-ups per capita than anywhere else

in the world. It is regarded as the home of

the ‘second Silicon Valley’.

Australian Private Equity & Venture Capital Journal MAY 2015 · Year 24 No 252 | 14

“The Israeli government put in place

a good range of policies to support

innovation and reward risk.

“For example, through the Office of the

Chief Scientist, the Israeli Government

makes targeted investment through an

‘incubators’ program that focusses on

commercialisation of new, but yet to be

developed, concepts.

“The Chief Scientist also runs a seed

funding program. The program is based on

the government matching an investment

in a start-up company in exchange for

equity in the company. If the company is

successful the investor has the option to

buy out the Government at any point in its

first seven years at a fair price.

“To bring all this together, the country’s

progress in the area of innovation is

benchmarked against an annual innovation

report, produced by the Chief Scientist.

“The Australian Government has different

ways of supporting innovation such as

through our new Industry Growth Centres

and Research and Development Tax

Concessions. These initiatives help new

businesses and ideas get off the ground in

Australia.

“We are also mindful that with risk must

come the potential for reward. That is why

we have recently changed Employee Share

Schemes to make it easier for employers

to offer their employees some ‘skin in the

game’. And we are actively engaged in

developing a sustainable model for crowd

sourced funding so that start-ups can raise

the funds they need in a competitive global

environment.

“In every business meeting I attend, it

becomes more and more obvious that

commerce is a truly global business.

“For example, whilst Google Maps was

invented in Australia, Google Autocomplete

was invented in Israel.

“Same company with different services

and different innovators!

“I believe that the economic conditions

in Australia are right for us to accelerate,

and do more. There are already many

great Australian firms that have started

out with an idea and grown into successful

businesses.

“Earlier this month, I met with a truly

inspirational bunch of entrepreneurs in the

offices of a company called Atlassian. Two

former university students started Atlassian

with a $10,000 credit card loan in 2001.

“They now sell software to more than

30,000 customers world-wide. Atlassian

has offices in Australia, the United States

and Europe, employs more than 6,000

people and is valued at over $3 billion.

“Now the founders of Atlassian are

helping to mentor and finance the

development of other Australian small

business start-ups.

“Many of us know that a thriving small

business sector is at the heart of Australia’s

economy. Those small businesses employ

4.5 million people and contribute a third of

Australia’s output.

“This contribution is only set to grow.

“Last year, we saw a record number of

223,000 new small business registrations

– a full 10 per cent higher than in the

previous year.

“The Budget’s Small Business and Jobs

Package will provide a further boost

to energise small business growth and

employment, and will help ensure that

Australia’s unemployed have the skills

and support they need to move into

future careers.”

PERFORMANCENEW STyLE VEHICLE LEASING BUSINESS SUCCESSFULLy FLOATED

Ironbridge Capital successfully listed

Eclipx Group (ASX: ECX) on 22 April. The

company ended its first day with a share

price of $2.78 compared with the IPO price

of $2.30.

At the offer price, Eclipx had an adjusted

enterprise value of $597.6 million.

The IPO raised $250 million with 110.1

million new shares issued to give the

company a post-float total of 225.4 million

shares.

The capital was to be used in part to

pay out exiting stakeholders.

Ironbridge retained its entire stake

of about 40.6 per cent. Sing Glow, an

investment holding company subsidiary

of Singapore government investment

company GIC Special Investments Private

Limited, exited its entire stake.

In its prospectus, Eclipx forecast

pro-forma net profit after tax (NPAT)

of $44.6 million for the 2015 financial

year, up from $21.2 million in 2014. That

gave an investment valuation of 11 times

forecast NPAT excluding amortisations and

impairment of intangible assets on a post-

tax basis.

The company indicated it would pay

a dividend of 4.8-5.6 per cent assuming

forecasts were achieved.

In January 2014, Ironbridge recruited

Doc Klotz now chief executive of Eclipx

and Garry McLennan as deputy chief

executive and chief financial officer, both

former executives of Flexigroup (ASX:

FXL), to lead the new business which

it planned to develop from its investee

company FleetPartners.

The Ironbridge vision for Eclipx was to

disrupt the way the traditional vehicle fleet

leasing and management business model

by focusing on online delivery of customer

services while targeting adjacent financial

services opportunities.

Established vehicle fleet leasing and

management companies FleetPartners

and FleetPlus were acquired by the new

business in August; CarLoans, the owner

of the CarLoans.com.au website, was

acquired in October, and then Eclipx

Commercial, a new business providing

office and general equipment financing,

was launched in December.

Fleet Partners was founded in 1987 as

the vehicle fleet leasing and management

business of ANZ Bank-owned Esanda

Finance.

Now defunct private equity firm Nikko

Principal Investments Australia acquired

Fleet Partners in 2006 for $379 million

(APE&VCJ, Oct 06) and in turn Ironbridge

acquired the company in 2008 with Sing

Gow and current and former members of

the management team also investing.

Eclipx shares closed at $2.73 on 4 May.

INVESTMENT ACTIVITyFOOTWEAR RETAIL CHAIN A ‘COMPLEMENTARy’ ACqUISITION

Anchorage Capital Partners has described

its acquisition of retail chain Shoes &

Sox Pty Ltd as “highly complementary”

to its acquisition late last year of Brand

Collective (APE&VCJ, Dec 14).

The acquisition of Shoes & Sox, which

specialises in professional fitting of

children’s shoes (APE&VCJ, Mar 15), was

completed on 31 March.

Anchorage managing director Simon

Woodhouse said: “As Brand Collective’s

Australian Private Equity & Venture Capital Journal MAY 2015 · Year 24 No 252 | 15

largest customer for Clarks shoes, the

acquisition of Shoes & Sox enhances Brand

Collective’s pathway to the customer and

improves Brand Collective’s position in

the footwear value chain. Along with the

strategic value for Brand Collective, there

is significant opportunity to grow the

Shoes & Sox retail network in this specialty

segment.”

Woodhouse said Shoes & Sox had

an experienced and highly regarded

leadership team led by Martin and Michele

Tabachnik. The Tabachnik’s were to remain

with the company for at least two years.

Martin Tabachnik, the company’s

managing director, said: “This transaction

represents an exciting new phase for

Shoes & Sox, providing additional scale to

drive future growth.”

Anchorage will be represented on the

board of Shoes & Sox by Woodhouse, as

chairman, and fellow Anchorage managing

director Daniel Wong as a non-executive

director.

Shoes & Sox has 24 stores in

metropolitan shopping centres across

Australia and employs around 200 staff.

INVESTMENT ACTIVITyAUSTRALIAN FOUNDED TECH COMPANy RAISES $US10M IN VENTURE CAPITAL

Recruit Strategic Partners has led a

$US10 million Series B funding round

for Australian-founded graphic design

marketplace 99designs.

Recruit Capital Partners is the Silicon

Valley-based venture arm of Japanese

information services and human resources

company Recruit Holdings Co.

Silicon Valley-based venture capital firm

Accel Partners, which led 99designs 2011

Series A fundraising, has also invested in

the round and gained a board seat for

partner Rob Solomon.

According to 99designs chief executive

Patrick Llewelyn, the Recruit investment

represents a strategic move to support the

company’s further international expansion,

particularly in Japan and other parts of

Asia where Recruit is a dominant force

in information services and marketplace

matching services.

“We knew that we would need the right

partner to enter Japan and expand our

footprint in the broader Asia market,” said

Llewellyn. “Recruit believes crowdsourcing

and marketplaces are an important part

of the future of work and in empowering

people to follow their dreams and find

opportunity.”

99designs now has its headquarters in

San Francisco.

Accel has also invested in Australian

companies Atlassian, Campaign Monitor

and OzForex.

INFORMAL VENTURE CAPITAL SOFTWARE BOOM BOOSTING NEW ZEALAND ANGEL INVESTING

Growing enthusiasm for software

investment boosted angel group and

angel fund investing in New Zealand to a

new high of $NZ55.9 million in 2014, the

New Zealand Venture Investment Fund

(NZVIF) has reported.

Releasing the latest Young Company

Finance Index, NZVIF chief executive

Franceska Banga said last year’s figure

compared with $NZ53.1 million in 2013.

“When the Index first measured angel

group investment activity in 2006, just

over $NZ20 million was being invested

annually. The sector – if current growth

trends continue – is likely to treble within

a decade,” she said.

“The driver of this over the past few

years has been the rise and rise of

investment in software companies – with

$NZ26.2 million last year and $NZ27.9

million in 2013 – around half of the

annual investment. Historically software

companies have attracted about a third

of the annual angel group investment.

“This is likely due to the demonstrator

effect of companies such as Xero (ASX/

NSX: XRO), Orion Health and Jade, along

with global trends towards all things

digital. Alongside the fact that New

Zealanders have a good track record

in this sector, the pathway for creation

of valuable enterprises is now more

straightforward than in the past.

“The last year saw a higher level

of ‘new’ compared with ‘follow-on’

investment – $NZ21.3 million of new

investment in 2014 compared with

2013’s $NZ10.3 million. This is a positive

sign for the continuing flow of the tech

company pipeline.”

Banga said that in addition to the angel

group investment activity, which the

Young Company Finance Index recorded,

considerable additional angel investment

was taking place.

NZ Angel Association chair Marcel

van den Assum said growing numbers

of angel investors joining networks and

funds had helped make 2014 a record

investment year.

“While it is a difficult statistic to

assess, we estimate the number of angel

investors involved in networks has grown

from around 370 to 730 in the past two

years,” he said. Having more investors

contributing to deals is also good for the

sector in that it allows individual angels

to spread their capital across wider

portfolios.

“The healthy result is indicative of

wider interest and support for innovation

and entrepreneurs throughout the

ecosystem – accelerator and incubators,

government IP commercialisation

initiatives, the rise in IPO activity and the

NZX’s NXT market promotion, and crowd

funding. Angels are riding – and also

part of creating – the investment wave.

“Having built momentum in seed and

start-up, the consistent investment

contribution by angels suggests

a maturing of the sector with the

perspective now shifting to outcomes

and value creation. Angel groups are

diversifying into side-car and showcase

funds, reducing the barriers to entry,

increasing the pipeline professionalism

through improved deal selection

processes.”

Banga said it was pleasing to see the

leverage effect of NZVIF’s Seed Co-

Investment Fund which the New Zealand

Government had set up to catalyse

greater levels of angel investment

activity.

“Since SCIF’s establishment a decade

ago, angel fund investment activity has

grown from $NZ20 million per annum

to nearly $60 million,” she said. “SCIF

was designed to co-invest alongside

angels on a one-to-one basis. SCIF

currently invests around $NZ5 million

a year alongside around $30 million of

investment led by its angel fund partners

with other investors also contributing.”

Numbers:

Australian Private Equity & Venture Capital Journal MAY 2015 · Year 24 No 252 | 16

from Telstra (ASX: TLS) in early 2014 in

a deal that valued the business at $649

million (APE&VCJ, Feb 14). Telstra retains

the remaining 30 per cent of Sensis.

Location Navigation operates the

Whereis Maps business which has been

electronically mapping roads in Australia

and New Zealand for GPS systems since

1997. TomTom has acquired all business

assets of Location Navigation including its

mapping IP and customer database.

Managing Director of TomTom Maps

Charles Cautley, said: “With this acquisition,

we further strengthen our global map

offering for automotive and licensing

customers. TomTom will build on Location

Navigation’s already high quality, richly

attributed maps of Australia to deliver

real-time maps that will enable highly

automated driving and internet of things

applications for our customers.”

INVESTMENT ACTIVITyAUSTRALIAN VENTURE FIRM INVESTS IN US MEDICAL TECHNOLOGy

Venture capital and private equity firm

M.H. Carnegie has invested in California-

based Simplify Medical Inc., the developer

of a non-metal artificial spinal disc.

In February the company gained

the CE Mark for its trademarked

Simplify Disc, enabling it to market the

product in European Union nations and

other countries that accept the EU’s

CE Mark.

PERFORMANCESALE OF NEW ZEALAND ANALyTICS BUSINESS RESULTS IN SUCCESSFUL ExIT

New Zealand private equity firm

Endeavour Capital has exited its

investment in business analytics company

11Ants Analytics as a result of the company

being acquired by a joint venture between

Air New Zealand (NZX: AIR) and Canada-

based Aimia Inc., a marketing and analytics

company.

No financial details of the acquisition

have been disclosed but co-owner

WaikatoLink, the commercial arm of the

University of Waikato, described it as a

successful exit. A number of minority

stakeholders also exited the investment.

11Ants was founded by WaikatoLink in

2007 with Endeavour Capital providing

venture capital. The business was based

on machine learning research from the

university.

11Ants’ main product is 11Ants RAP, a

cloud-based platform for the retail sector

that uses customer data to gain insights

which retailers can use to develop deeper

customer relationships.

INVESTMENT ACTIVITyBOLT-ON INVESTMENT FOR ONLINE LEARNING BUSINESS

The Riverside Company has acquired

Melbourne-based e-learning business

C-Learning Pty Ltd as a bolt-on addition

to its investee company Learning Seat.

According to Riverside, C-Learning’s

proven learning management system and

internally developed Spark HTML editing

tool will help Learning Seat develop and

deploy content more efficiently.

Riverside principal Nick Speer said:

“We’re delighted to bolster Learning

Seat’s comprehensive training offerings

with the addition of an excellent

company like C-Learning. Customers

of both companies will see significant

benefits from this powerful combination,

as it combines two strong teams with

complementary capabilities.”

Head of Riverside’s Melbourne office,

managing partner Simon Feiglin, senior

associate Jonathan Shin and associate

Kevin Xu worked on the acquisition with

Speer. Wingate Group, which is a co-

investment partner in Learning Seat, was

also involved.

Debt financing for the transaction was

provided by Commonwealth Bank.

KPMG provided financial advice while

Lander & Rogers provided legal advice.

A syndicate including Riverside,

Wingate and Wingate co-investment

partners acquired Learning Seat from

News Limited in 2012 (APE&VCJ, Nov 12).

Riverside took a 51 per cent stake in

the business.

Learning Seat provides online

compliance and training to more than

500 organisations in Australia and

New Zealand.

• 2014 saw a slightly smaller average

deal size, $NZ490,000, compared

with $NZ505,600 in 2013.

• Of the $NZ55.9 million invested in

2014, 62 per cent, $NZ34.6 million,

was follow-on investment and

38 per cent, $NZ21.3 million, was

new investment. This level of new

investment was more than twice that

of the 2013 figure of $NZ10.3 million.

• In terms of the stages of investment,

$NZ23.1 million was seed investment,

$28.1 million was invested at the start-

up stage and $NZ 3.1 million across

the early expansion/ expansion

stages. The comparative values for

2013 were $NZ13.7 million, $NA29.8

million and $NZ9.5 million.

• 2014 saw 78 per cent of deals

syndicated between different angel

groups, a continuation of the trend

of very high levels of collaboration

between angel groups.

• Of the type of investment

instruments used by angels in 2014,

25 per cent of investments were

convertible loans, 8 per cent were

ordinary shares and 27 per cent were

preference shares.

• Since 2006, by region, 54 per cent

of investment was in Auckland, 11 per

cent in Christchurch and Wellington, 7

per cent in Dunedin, and 5 per cent in

Palmerston North and Hamilton and 3

per cent in Tauranga.

• Since 2006, software and services

have received 35 per cent of the

total investment followed by

pharmaceuticals/ life sciences

technology, 17 per cent; technology

hardware and equipment, 12 per cent;

and food and beverage, 8 per cent.

PERFORMANCEELECTRONIC MAPPING BUSINESS DIVESTED TO GLOBAL OPERATOR

Platinum Equity investee Sensis has

divested its Location Navigation Pty Ltd

business to Netherlands-based global GPS

systems operator TomTom NV (ENXTAM:

TOM2) S&P’s Capital IQ has reported.

No financial details of the transaction

have been disclosed.

US private equity firm Platinum bought

70 per cent of directories business Sensis

Australian Private Equity & Venture Capital Journal MAY 2015 · Year 24 No 252 | 17

The private equity owners appointed

new key executives to Learning Seat

after acquisition including chief executive

Scott Deane and general manager,

operations, Rick Zucchelli.

NEWS Uk STUDy FINDS PRIVATE EqUITy-FUNDED SMES OUTPERFORM LISTED RIVALSBy European correspondent Selwyn Parker

Just a year ago UK-based ACC Aviation, a

specialist in aircraft leasing and chartering

with a turnover of around £53m, had

one foreign office – in Rome. Now it’s

expanding into the Asia-Pacific and the

Middle East following a management

buy-out in 2014 funded by YFM Equity, a

British specialist in fast-growing SMEs.

Although the financial details were not

revealed, YFM generally invests no more

than £10 million in portfolio companies.

However over the last 30 years it has a

track record of successful involvement

in businesses with export potential

and has become one of a number of

poster investment firms cited by the

British Private Equity & Venture Capital

Association (BVCA) in a campaign to

highlight the contribution made to the

economically vital SME sector by astute

financial leverage.

As BVCA’s director general Tim Hames

points out: “Around 90 per cent of private

equity and venture capital investment

in the UK is directed at SMEs and ours

is an industry which has a proven track

record in helping businesses to grow and

succeed.”

Like its Australian counterpart, AVCAL,

the BVCA is lobbying for a range of tax

and other incentives that would boost

the development of the sector as well as

the returns of venture capitalists. It wants

help for spin-outs from universities, R&D

tax credits, and support for early-stage

research. The BVCA also argues that all

support, whatever its nature, should be

targeted at key geographies (such as

Asia-Pacific) and sectors where the UK is

already strong.

The campaign has profiled a swathe of

start-ups and fledgling SMEs that have

been able to leapfrog into new markets

including the Asia-Pacific because of an

injection of debt-financing. For instance

DiGiCo, an electronic company that

manufactures audio-mixing consoles,

has been able to distribute into Australia

following its 2014 takeover by Electra

Partners, a mid-market specialist that has

invested £4.4 billion in more than 200

deals over the last 20 years.

Similarly CCS, a Cambridge-based

manufacturer of small microwave-

powered backhaul systems for boosting

cell phone coverage, could be heading to

Australia via China. Funded by Imperial

Innovations, which specialises in the

commercialisation of university research,

CCS’s lamppost-mounted systems will

soon be manufactured in Wuxi for China

Mobile, the country’s (and the world’s)

biggest mobile operator.

The latest BVCA research makes a

strong case for skilfully applied leverage,

especially when linked with the active

involvement of the investor. Based on the

last seven years, including the fall-out

from the global financial crisis, a study of

68 portfolio companies worth £92 billion

not only showed that none suffered a

“material negative effect from private-

equity ownership”, judged by a wide

variety of metrics, but that their returns

comfortably beat listed companies.

Of 35 portfolio companies exited by

private equity between 2005 and 2013,

the gross equity gains beat comparable

public company benchmarks by a factor

of 6.5 times. Overall, the private sector

invested £32 billion in these companies.

The BVCA’s conclusion: “Private equity

and operational improvement, plus the net

financial benefits of additional leverage,

explain this significant out-performance in

broadly equal amounts.”

INVESTMENT ACTIVITyNEW INVESTMENT PARTNERSHIP TAkES STAkE IN LIGHTING BUSINESS

South African principal investment firm

Global Capital has invested in Sydney-

based emergency lighting business Evolt

Pty Ltd.

The investment has helped finance

Evolt’s acquisition of Atom Lighting, a

Queensland-based distributor of LED

lighting products.

Financial details of the deal have

not been disclosed but Global Capital

typically invests $5 to $10 million in

minority stakes.

Global Capital recently established

a partnership with South Africa-based

investment bank Investec’s Australian

operations. Investec is a significant

investor in Global Capital which

manages a number of funds on behalf of

institutional and private investors.

Global Capital Australia investment

director Bradley Hill said the firm had

invested in Evolt after identifying strong

growth opportunities in the general

lighting and emergency lighting markets.

“As an established player in the

market, Evolt and Atom fit in well with

the strategy of targeting companies that

offer an annual income stream and capital

growth potential,” he said. “Evolt is backed

by an experienced chief executive with a

strong pedigree in the industry. With our

investment, Evolt is now well placed to

grow and further diversify its business.”

Investec Australia head of growth and

acquisition finance Mark Joffe said the

bank believed there was significant scope

for further similar development capital

deals in the Australian market.

“The investment in Evolt is reflective

of Investec’s philosophy of supporting

and growing entrepreneurial businesses,”

he said. “We are also very excited

about partnering with Global Capital

which reaffirms our commitment to the

Australian market and the opportunities

we see in the mid-market space.”

INVESTMENT ACTIVITyEMERGING MARkETS FIRM INVESTS IN INDONESIAN FINANCIAL SERVICES

Sydney-based emerging markets private

equity firm LeapFrog Investments has

invested in Indonesian financial services

company Reliance Capital Management.

The Sydney-based firm has invested

alongside Dutch development bank FMO,

and Bermuda-based global reinsurer

PartnerRe. The partners’ total investment is

Rp526 billion ($US45 million).

The investment, LeapFrog’s first in

Indonesia, gives the investors a significant

minority stake in the business.

Australian Private Equity & Venture Capital Journal MAY 2015 · Year 24 No 252 | 18

Reliance is a diversified financial

services company that includes

Indonesia’s fourth largest health insurer, a

listed top-five retail securities arm, a fast

growing life insurer, operations in general

insurance, plus multi-finance and asset

management businesses.

Reliance has about 750,000 end-

user customers and provides services

to a wide range of local and global

institutional clients. The company

recently announced an investment in BKE

Bank, a retail banking operation which

focuses on improving access to financial

services.

The announcement of the Reliance

investment follows LeapFrog’s recent

investment in SMK, a Thai insurance

company.

LeapFrog partner and South-East Asia

head Michael Fernandes said: “We are

exceptionally positive about the quality

of the team at Reliance and its ability to

address the enormous opportunities in

the Indonesian market.”

Reliance president and founder Anton

Budidjaja said he believed the investors

would provide skills and insights to help

the company introduce financial services

to new users.

Continuing growth of Indonesia’s

economy is expected to see the country’s

middle class grow to 140 million people

over the next ten years but expenditure

on insurance is still low at around 2.1 per

cent of GDP. While the country has one

of fastest expanding banking sectors in

South-East Asia the percentage of adults

using banking services is still low with

only 36 per cent having an account. This

compares with 78 per cent in Thailand.

LeapFrog has an impact investing

strategy which founder Andrew Kuper

describes as “profit with a purpose”.

The firm seeks conventional high private

equity returns from its investments but

only invests in businesses which provide

social benefits.

NEWSSALE AND LEASE BACk OPTION FOR INVESTEE’S REAL ESTATE HOLDINGS

Crescent Capital is believed to be

examining sale and lease back options

for real estate holdings of the Australian

Pentair Water Transport business which it

acquired in January.

Global company Pentair (NYSE: PNR)

decided to exit the business in July

and appointed Deutsche Bank to find a

buyer. The results for the business were

presented as “discontinued operations

held for sale” in the company’s third

quarter results released in October. An

impairment charge of $US380, net of

tax, was booked as an estimated loss on

the disposal of the business. Pentair had

acquired the Australian water transport

business less than three years ago as part

of a merger with Tyco Flow.

Crescent has not disclosed what it paid

for the business but it is likely to have

been nearer the lower than the higher

end of its enterprise value target range of

$50 million to $300 million for Fund V.

Pentair Water Transport manufactures

and distributes steel, iron and plastic

water pipes and components and also

constructs and operates water services

facilities for clients. Clients include

government bodies as well as private

businesses. Recent performance is

believed to have been adversely affected

by the downturn in the mining sector

resulting in reduced demand for water

services in remote locations.

Last year, Pentair Water Transport laid

a 120 kilometre pipeline for SunWater

to take water used in coal seam gas

production from Queensland Gas

Company’s Curtis liquefied natural gas

plant near Gladstone to Glebe Weir

on the Dawson River. The water is put

through a treatment plant and then into

the pipeline which supplies agricultural

users around Woleebee Creek along

the way.

Crescent Capital raised $675 million for

Crescent V fund late last year (APE&VCJ,

Dec 15).

NEWSASIA-PACIFIC’S MOST ACTIVE NON-BANk LENDER RECOGNISED

Global asset management firm Babson

Capital Management has been recognised

as the most active non-bank lender in the

Asia-Pacific region in 2014 by the Asia

Pacific Loan Market Association (APLMA).

APLMA introduced the award to

recognise the increased role of non-bank

lenders in servicing the capital needs of

businesses in the region. Babson was

selected as the award’s first recipient

based on a survey of industry peers.

US-based Babson offers a full range

of financing to corporate borrowers in

the Asia-Pacific region, including directly

originated senior secured and second-lien

loans, mezzanine debt with equity features

and unitranche debt that combines

characteristics of senior and mezzanine

debt tranches.

Babson has been active in the Asia-

Pacific region for more than a decade and

has offices in Sydney, Melbourne, Hong

Kong and Tokyo.

Babson’s head of global private finance,

Eric Lloyd said: “The Asia-Pacific region’s

dynamic economy has created compelling

opportunities for lenders who can meet

the capital needs of borrowers. Our goal

is to help issuers access the capital they

need for their businesses while providing

access and returns for our investors.”

Babson, part of the MassMutual Financial

Group, has about $212 billion in assets

under management globally.

Opportunities for non-bank lenders

to provide loan funding for businesses,

including backing private equity deals,

in Australia and other parts of the Asia-

Pacific have increased significantly in

recent years as European banks have

withdrawn from the market in the wake of

the 2008 global financial crisis.

PERFORMANCEVENTURE-BACkED WEB SERVICES START-UP ACqUIRED

Australian-founded website development

marketplace Elto has been acquired by US

web hosting and web services provider

GoDaddy. Terms of the acquisition have not

been disclosed.

Founded in 2012 by P.J. Murray and

Ned Dwyer, Tweaky – as the business

was then known – attracted early funding

from the founders of 99Designs and then

Blackbird Ventures. The two rounds of

funding are believed to have totalled less

than $1 million.

Now based in San Francisco, Elto has

about 25,000 customers.

Australian Private Equity & Venture Capital Journal MAY 2015 · Year 24 No 252 | 19

GoDaddy recently listed on the New

York Stock Exchange (NYSE: GDDY).

INVESTEE NEWSHEALTHCARE SOFTWARE COMPANy PARTNERS WITH Uk BUSINESS

Healthcare informatics company Alcidion

Corporation has signed a memorandum

of understanding (MOU) with UK-based

Ascribe, a leading provider of connected

healthcare software and services.

The MOU will enable Alcidion’s

clinical decision support software to be

integrated with Ascribe’s broader health

application platform.

The partnership will initially focus

on the Australian emergency medicine

market in which Alcidion and Ascribe

products have already been linked.

Alcidion’s Miya ED dashboard platform,

that displays “clean” integrated data from

central information repositories, has been

interfaced with Ascribe’s emergency care

clinical information system Symphony.

The partnership will later be extended to

Ascribe’s UK customers.

According to South Australia-

based Alcidion, hospital emergency

departments face a unique challenge

– coping with increasing numbers of

patients requiring complex treatment

while at the same time being required

to achieve key performance objectives

relating to quality of care and time

to discharge. Software programs can

minimise the possibility that specific risks

for individual patients are not identified

and dealt with.

Alcidion chief executive Ray Blight

said: “Alcidion’s focus is on empowering

clinicians to deliver the highest quality

patient care. By partnering with Ascribe

we can leverage the rich functionality of

Symphony and the Ascribe solution suite

to really make a difference to patient care

across the hospital environment.”

Ascribe is part of EMIS Group plc, a

leading provider of connected healthcare

software and services.

Blue Sky Private Equity, a division

of Blue Sky Alternative Investment

(ASX: BLA) and Allure Capital recently

participated in a follow-on capital raising

by Alcidion (APE&VCJ, Apr 15).

NEWSINVESTOR ExPECTED TO RETAIN STAkE IF BABy GOODS BUSINESS FLOATS

Baby goods chain Baby Bunting may

seek to raise more than $150 million in an

IPO later this year, assuming demand for

ASX floats remains strong.

But whether Baby Bunting floats or not,

the largest shareholder, Sydney-based

TDM Asset Management is expected to

retain its large minority stake.

TDM bought into Baby Bunting in 2011

but as a long term investor in both public

and private companies it is believed to

have no plans to exit the business.

Baby Bunting currently has 27 stores

nationally and plans to roll out many

more.

The company has leadership with

strong public company experience. The

chief executive is Matt Spencer, former

general manager, retail, of Kathmandu

(ASX: KDM), and the chairman is Barry

Saunders, former managing director of

The Reject Shop (ASX: TRS).

Another TDM Asset Management

investee, Pacific Smiles (ASX: PSQ),

raised $42 million when it was floated

on the ASX in November. Pacific Smiles

provides administrative services to

independent dental practices. TDM Asset

Management has retained a significant

stake in that business.

TDM Asset Management manages

investments globally for a small number

of high net worth families. The business

has a New York office and is an active

investor in US small cap listed companies.

INVESTMENT ACTIVTyINFRASTRUCTURE MANAGERS TO MOVE TO FULL OWNERSHIP OF WIND FARM

Sydney-based Palisade Investment

Partners and Toronto-based Northleaf

Capital Partners are to move to 100 per

cent ownership of the Waterloo Wind

Farm in the Clare Valley, South Australia.

The infrastructure investment firms

are to buy the remaining 25 per cent

stake held by the facility’s developer

and main customer EnergyAustralia.

Palisade and Northleaf jointly acquired

a 75 per cent stake in the wind farm

in 2013.

Waterloo Wind farm will continue to

be operated by EnergyAustralia. The

facility currently consists of 37 3MW

turbine towers. EnergyAustralia is seeking

planning permission to add six more.

EnergyAustralia is to continue to take 50

per cent of the electricity generated by

the wind farm under a long term power

purchase agreement.

Palisade investment director Daniel

Roberts said: “Waterloo Wind Farm

has performed well since acquisition

and continues to provide stable, long

term returns to investors. Through

the acquisition, investors maintain the

relationship with EnergyAustralia while

increasing their exposure to a high

performing asset.”

Palisade has more than $1.8 billion in

funds under management and is currently

invested in a portfolio of more than 18

infrastructure assets.

Northleaf Capital Partners is a global

private equity and infrastructure manager

with more than $6 billion in funds under

management.

NEWSNSW MINISTER FOR INNOVATION

Victor Dominello has been appointed

NSW minister for innovation and better

regulation.

Dominello was moved from aboriginal

and multicultural affairs in a cabinet

reshuffle following the re-election of

Premier Mike Baird’s Liberal government in

March.

Gillian Skinner retained the health

portfolio.

PEOPLE MOVESSUPER FUND SEEkS INVESTMENT TEAM MEMBER

Melbourne-based industry superannuation

fund CareSuper is seeking to appoint a

manager, investments.

The appointee will report to the fund’s

general manager, investments.

CareSuper says the position would suit

an experienced investment professional

Australian Private Equity & Venture Capital Journal MAY 2015 · Year 24 No 252 | 20

with demonstrated experience in

investment markets or a related discipline

and experience across multi asset classes.

NEWSNSW GOVERNMENT BACkS COMMERCIALISATION PROjECT

The NSW state government has pledged

funding for venture-backed hydrogen

technology company AquaHydrex to set

up production operations in Wollongong.

The funding – to be provided from the

Regional Industries Investment Fund,

administered by NSW Trade & Investment

– will help develop a facility expected to

create up to 120 jobs

Deputy Premier Troy Grant said he

expected the company to generate a large

proportion of export sales.

The technologies used by AquaHydrex

were developed from research at

Wollongong and Monash Universities.

The research teams developed new,

more efficient electrochemical systems

for splitting water molecules to produce

hydrogen.

AquaHydrex was spun out of the ARC

Centre of Excellence for Electromaterials

Sciences in late 2012 with the assistance

of UniQuest, Wollongong and Monash

Universities. The start-up attracted

investment from Chicago-based early

stage venture capital firm True North

Venture Partners.

Professor Gordon Wallace of

Wollongong University, who played a key

role in the development of the AquaHydrex

technologies, said he believed the

funding would help the company develop

facilities and attract research personnel

which would enable it to sustain a global

leadership position.

PEOPLE MOVESSUPER FUND APPOINTS NEW HEAD OF INVESTMENTS

The $4.5 billion LUCRF (Labor Union

Co-operative Retirement Fund) industry

superannuation fund has appointed Martin

Drew as its new head of investments.

Drew’s previous positions included chief

investment officer at State Super and

consultant at Mercer.

PEOPLE MOVES SUPER FUND CHIEF ExECUTIVE STANDS DOWN

Chief executive of Statewide Super, South

Australia, John O’Flaherty has stepped

down after five years in the role.

O’Flaherty led the organisation through a

merger with Local Super which made it the

state’s largest superannuation fund.

No announcement has yet been made on

a new chief executive.

Statewide offers members a wide range

of investment options not all of which

include exposure to alternative assets.

The high growth option has a 5

per cent strategic asset allocation to

growth alternatives and 10 per cent to

infrastructure.

Statewide reported a return of 16.25

per cent for the high growth option for

the 2013-14 financial year. This compared

with 14.95 per cent for its default MySuper

option.

Statewide’s private equity and venture

capital managers as at 30 June 2014 were:

Brandon Capital Partners, CM Capital

Venture Trust, Energy Investors Fund

(US), GBS Venture Partners, Industry

Funds Management (now IFM Investors),

Innovation Capital, Medical Research

Commercialisation Fund, NBC Capital,

Partners Group, Pomona Capital, Quadrant

Private Equity, Quay Partners (now Stafford

Capital Partners), Southern Cross Fund

No 1, Starfish Ventures, Wilshire Australia,

Wolseley Partners.

NEWSNEW CATEGORIES FOR GROWTH COMPANy AWARDS

Categories have been extended for this

year’s Australian Growth Company Awards.

The awards celebrate excellence in the

mid-market recognising achievements in

growth, innovation, integrity, sustainability

and contribution to community.

There are some new and revised

categories for this year’s awards, which

now comprise:

• Growth Company of the Year Award

• Agri-Business and Food Growth

Company of the Year Award

• Wholesale and Manufacturing Growth

Company of the Year Award

• Financial Services and Business Services

Growth Company of the Year Award

• Health and Life Sciences Growth

Company of the Year Award

• Technology Growth Company of the

Year Award

• Women in Leadership Award, and

• Exit of the Year Award.

Nominations for this year’s awards open

on 1 July and close on 1 September.

Participation in the awards gives

companies opportunities to gain industry

recognition, raise their business profile

and network with award sponsors as well

as possibly gaining interest from potential

investors and business partners.

Intralinks and 2020 Exchange have

joined this year as gold and silver

sponsors, respectively. They join existing

sponsors Sparke Helmore Lawyers,

Deloitte, Macquarie Capital, MYOB, and

silver sponsor AVCAL.

For more information on the awards,

visit: http://www.sparke.com.au/our-firm/

initiatives/australian-growth-company-

awards

PEOPLE MOVESINSTITUTIONAL INVESTOR APPOINTS NEW CHIEF ExECUTIVE

Jo Townsend has become chief executive

of Funds SA following the retirement of

Richard Smith in January.

Townsend was previously chief

operating officer at REST Super. She was

appointed chief executive of Funds SA in

February and took up the role in April.

Funds SA manages $25 billion in state

government superannuation and funds of

state government authorities.

NEWSPASTORAL LEASE OPERATIONS UP FOR SALE

Australia’s largest pastoral lease operator

S. Kidman & Co. plans to sell its entire beef

operations.

Kidman runs more than 200,000 head

of cattle across 18 pastoral leases and

a feedlot operation near the Barossa

Valley in South Australia. The cattle

stations, which include the world’s largest

Australian Private Equity & Venture Capital Journal MAY 2015 · Year 24 No 252 | 21

cattle property Anna Creek, cover more

than 110,000 square kilometres across

Western Australia, the Northern Territory,

Queensland and South Australia.

Producing around 15,000 tonnes of

beef annually, Kidman accounts for about

1.3 per cent of Australia’s slaughtered

beef exports.

Kidman managing director Greg

Campbell said increased demand for

agricultural assets was behind the

decision to sell by the business owners,

descendants of founder Sir Sidney Kidman.

The company planned to invest capital

gains in other business ventures.

Global private equity and infrastructure

firms, sovereign wealth funds and Asian

investors appear the most likely acquirers

of the Kidman beef interests.

UK-based private equity firm Terra Firm

Capital is the majority owner of another

large beef cattle operation Consolidated

Pastoral Company.

NEWSCONFUSED SITUATION ON TAxATION OF EARN-OUTS TO BE ADDRESSED

The federal Treasury has finally released

an Exposure Draft of legislation intended

to fix the confused situation regarding

the taxation of earn-outs created by a

controversial 2007 draft ruling by the ATO.

The required fix was first announced in

the 2010 budget.

According to Toby Eggleston of lawyers

Greenwoods & Herbert Smith Freehills,

under the ATO’s approach to standard

earn-outs, the seller’s disposal proceeds

for the underlying asset is the cash

received and the market value of the

earn-out right. Subsequent payments

are considered to be in respect of

the earn-out right rather than the

underlying asset. This limits the ability

of the seller to access certain capital

gains tax (CGT) concessions, such as the

CGT discount.

For the buyer, its cost base in the asset

is the cash paid plus the market value of

the earn-out right at the time of sale. Any

amounts subsequently paid by the buyer

under the earn-out are not included in

the cost base of the asset acquired. It is

unclear how the asset will be treated for

tax purposes.

The requirement to ascribe a market

value to the earn-out right, and

inconsistent CGT outcomes for subsequent

payments, make the ATO’s approach

unworkable in practice.

The proposed solution is to adopt

a “look-through” approach so that for

“qualifying earn-outs”:

• The earn-out will not be treated as a

separate CGT asset; and

• Earn-out payments adjust the seller’s

capital proceeds, and the buyers cost

base, in respect of the underlying asset

sale.

This approach requires taxpayers to

amend their tax return when payments are

received in different income years to the

asset sale – without interest and penalties.

Also, the seller’s ability to recognise an

initial capital loss from the underlying asset

sale may be deferred until the payments of

the earn-out are received.

The definition of a “qualifying earn-

out” is convoluted, particularly if the

assets disposed of are shares, rather than

business assets. To be a qualifying earn-

out:

• the earn-out must be a right to future

financial benefits that are not reasonably

ascertainable when the right is created;

• the earn-out must be created under an

arrangement that involves the disposal

of a CGT asset (depreciating assets are

not covered);

• the asset must be an “active asset”. The

test for whether a share is an active

asset is complex but broadly includes:

• an asset used or held ready for use in a

business (passive assets, such as assets

generating rent are excluded);

• a share in a company or interest in a

trust if at least 80% of the value of the

company or trust is referable to active

assets; or

• a share in a company or interest in a

trust if (a) the taxpayer holds 20 per

cent or more of the shares or interests,

(b) the company or the trust carried on

a business in the immediately preceding

income year and (c) 80 per cent or

more of the company’s or trust’s income

in that year came from carrying on

an active business – the 20 per cent

threshold is likely to prove problematic

where management exits an investment;

• all of the financial benefits under the

earn-out must be provided within four

hears (after the sale documentation is

signed);

• the value of the financial benefits must

be contingent on, and reasonably

relate to, the economic performance of

the active asset or business. Benefits

contingent on the outcome of litigation,

such as the earn-out in Sportingbet’s

acquisition of Centrebet, or on

discovering more information about an

asset such as the existence of resources,

will not be considered to be sufficiently

contingent on economic performance or

the business assets to qualify; and

• the parties must deal with each other at

arm’s length.

Presumably, earn-outs which are not

qualifying will be expected to apply the

(draft) ATO ruling.

The amendments will apply to earn-out

rights created on or after 23 April 2015

with protection for taxpayers who applied

the 2010 federal budget announcement.

Submissions on the proposed legislation

are due by 21 May.

To access Greenwood & Freehills Tax

Brief on the 2007 ATO Draft Ruling visit:

http://www.greenwoods.com.au/

media/1441/draft_ruling_on_the_taxation_

of_earn_out_arrangements.pdf

FEATURE

Australian Private Equity & Venture Capital Journal MAY 2015 · Year 24 No 252 | 22

Social Ventures Australia Consulting

has been working with the

Indigenous Martu organisation,

Kanyirninpa Jukurrpa (KJ), in Western

Australia to evaluate social returns on

investment (SROI) of its on-country

programs.

The analysis has concluded that

government investment over the last five

years has achieved social outcomes worth

more than twice the investment.

SROI is a methodology for measuring

the cultural, social and economic value

not reflected in conventional financial

accounting. SROI analysis is driven by

stakeholder engagement.

KJ aims to preserve Martu culture,

to build a viable, sustainable, economy

in Martu communities and to build

realistic pathways for young Martu to

a healthy and prosperous future. KJ’s

on-country programs include teams of

ranger employees, Kalyuku Ninti (Return

to Country) trips and Puntura-ya Ninti

(Culture and Heritage) programs. Roughly

half of KJ’s annual revenue is derived from

the federal government’s Working on

Country program.

Working on Country was introduced in

2007 and has since been expanded, with a

five-year $320 million funding commitment

announced in 2013. The Department of

Prime Minister and Cabinet has targeted

the employment of 730 full-time equivalent

Indigenous rangers on country by June this

year.

My SVA Consulting colleague Anna

Crabb and I took a three-week field trip to

the Martu communities in which KJ has a

presence – Punmu, Parnngurr and Jigalong

–to assess the effects of the organisation’s

work. half-way through our trip we spoke

with Martu elders in Parnngurr about their

concerns for the future. Parnngurr is

a Martu community on the edge of the

Karlamilyi National Park, 370 kilometres

east of Newman.

With the help of some simple sketches

which I drew to bridge the language gap,

the elders identified three key issues

for their community: maintenance of

connection to country, less time in lock-up

and increased income.

A swift consensus was reached on

prioritisation. Maintenance of connection to

country was considered most valuable. This

was not surprising. All eight of the elders

involved in the discussion were pujiman

(Martu bushmen) who had grown up in the

desert and came into contact with “white

fellas” as late as the 1960s.

During the trip, we spent considerable

time interviewing Martu stakeholders. The

location and time taken for interviews

varied dramatically. Some interviews were

planned in advance; others followed a

chance meeting. Some were conducted in

the KJ ranger coordinator’s house; others

took place in the red dirt next to the

Parnngurr community’s basketball court.

The length of the interviews was highly

dependent on the confidence and English

language skills of the Martu interviewees.

Those involved in this project who had also

been involved in a corresponding SROI

analysis in 2011, noted a dramatic increase

in confidence amongst interviewees.

With the help of Tim Schneider,

coordinator of KJ’s leadership program, I

interviewed a young man in Jigalong. Tim

INDIGENOUS PROGRAM DELIVERS SOCIAL RETURN

ACCORDING TO PRIME MINSTER

TONY ABBOTT, INDIGENOUS

PEOPLE RETURNING TO

TRADITIONAL LANDS ARE

MAKING A ‘LIFESTYLE CHOICE’

WHICH SHOULD NOT BE

SUPPORTED BY GOVERNMENT

FUNDING. ANALYSIS BY

SOCIAL VENTURES AUSTRALIA,

HOWEVER, PROVIDES EVIDENCE

OF THE VALUE OF AT LEAST

ONE INDIGENOUS HOMELANDS

PROJECT.

BY BRENDAN FERGUSON*

FEATURE

Australian Private Equity & Venture Capital Journal MAY 2015 · Year 24 No 252 | 23

explained that, just a few years earlier, he

had been asked to speak to a timid boy

who refused to leave his bedroom. Tim

suspected that the boy was suffering a

chronic form of depression. Through a

crack in the bedroom door, Tim managed

to convince the boy to go out on-country

the following day with KJ rangers.

Today, Tim explained, he is one of the

hardest working rangers across all three

communities.

“When I got out on-country,” the young

man said, “I felt at home.”

By the end of the project, by which time

most of my clothes had been permanently

stained by red dust, we had interviewed 95

people (including 54 Martu) to feed into

our SROI analysis.

kNOWLEDGE TRANSFERThe significance, for older Martu, of

maintaining a connection to country

extends beyond their personal connection.

They harbour an intense desire to see the

younger generation take responsibility

for their lives, and demonstrate that they

have earned the right to assume and

protect Martu Jukurrpa (culture). KJ’s on-

country programs facilitate the transfer of

knowledge from older to younger Martu.

“If we work and stay out of trouble, then

the old people have greater respect for

us and are more willing to pass on their

knowledge,” said Jeremy Sammy, a casual,

Punmu-based, ranger.

Over the five years in which KJ’s on-

country programs have been operating,

older rangers have displayed an increased

willingness to go out on-country with

younger rangers, sharing the stories and

dreaming associated with significant sites.

This change has created a sense of hope

and pride in Martu about their future.

Surviving pujiman are aging so there is

a limited window of opportunity during

which important sites can be located and

mapped, and the transfer of knowledge

can occur.

Darren Farmer, a Martu translator who

lives in Wiluna, said: “There is a process of

spiritual, social and cultural healing that

takes place when people go back on-

country. That’s something that isn’t often

seen; there’s a different side of our people

that comes out. There’s a real big change in

our mob when they’re out on-country.”

Jimmy Williams, a senior member of the

Parnngurr community, said: “Before KJ, the

young people were just wandering around

the community. We want them to be out

there, learning about their country.”

KJ’s on-country programs have

generated transformative change across

Martu communities. The programs have

produced a wide range of cultural, social

and economic outcomes (as well as

environmental and health outcomes which

were beyond the scope of our analysis).

Using financial proxies to estimate the

value of these outcomes, our report

concluded that KJ’s on-country programs

have generated $55 million worth of

social value, from a $20 million investment

required to deliver the programs over that

five-year period.

By improving the lives of Indigenous

Australians, KJ has demonstrated success

where many other initiatives have

failed. That success is predicated on the

alignment of Martu interests with those of

mainstream Australia.

Overwhelmingly, Martu want to spend

time on-country, caring for their country.

KJ’s on-country programs enable Martu

to fulfil their desire to live on, and care for,

their country, rather than moving to town.

The programs resonate with Martu culture

and make a substantial contribution to the

long-term vision of a healthy and vibrant

Martu community.

A young man in Parnngurr who was

working as a ranger said: “KJ gave me

a reason to come back from town [Port

Hedland]. If I hadn’t come back, I’d be

dead; dead or in lock-up.”

Over the 2013-14 financial year, a total

of 275 Martu people were employed in

programs supported by federal or West

Australian government funding. As a result,

KJ has been able to make a direct and

meaningful contribution to the targeted

improvement in Indigenous employment

outcomes identified by the Council of

Australian Governments’ (COAG) Closing

the Gap initiative.

Furthermore, by engaging Martu with

employment in dry communities, KJ has

significantly reduced alcohol consumption

and associated criminal activity. Our report

concluded that, simply through advocacy

support for Martu in their interactions with

the justice system, KJ has effectively saved

over 41 years of incarceration time amongst

Martu people.

These results are, however, the outcome

of a well-established partnership. KJ

advisory director Sue Davenport first

started working with the Martu people

in 1987. The mutual respect developed

between the Martu and KJ’s non-

Indigenous staff has only been possible

to achieve through this long and deep

engagement.

The ongoing challenge for KJ and other

Indigenous organisations around Australia

is to strengthen that partnership.

As Jigalong senior sergeant Neil Gordon

said: “We need to remember that KJ is still

a very young organisation. We won’t know

its true impact for another 20 years and

even then the results will be preliminary.”

*Brendan Ferguson is a member of

the consulting team of Social Ventures

Australia. This article is based on an article

in the latest edition of SVA Consulting

Quarterly. To read the original article go to:

http://svaconsultingquarterly.com/

Social Ventures Australia works with

innovative partners to invest in social

change. For more information visit: http://

socialventures.com.au

Australian Private Equity & Venture Capital Journal MAY 2015 · Year 24 No 252 | 24

REARVIEW MIRROR

5 yEARS AGO... MAy 2010FORMER WINE FUND FINALLy SHIFTS FOCUS

Investec Wentworth Private Equity-managed

First Opportunity Fund Limited (ASX:

FOF) plans to bring about a long planned

change of focus through the acquisition of a

telecommunications company.

The listed Pooled Development Fund

(PDF) is to acquire North Sydney-based

Vocus Group Limited for $20 million, subject

to shareholder approval in a deal which will

effectively be a backdoor listing for Vocus.

The purchase is to be financed by a cash

payment to Vocus shareholders of about

$6.52 million and the issue of more than 26.95

million ordinary shares to Vocus shareholders

at an issue price of 50 cents a share.

First Opportunity Fund is to seek to raise

up to $6 million through a combination

of share placements and a public offer to

partly finance the Vocus acquisition. Some

of the share placements are to be taken up

by funds managed by Investec Wentworth

Private Equity.

Meanwhile, the fund will dispose of its

residual wine related assets and distribute

the proceeds.

First Opportunity Fund was established in

1997 as a wine industry fund – the First Wine

Fund – but, with the wine industry in decline,

in 2005 the company decided to broaden its

activities to more general investing.

On February 2, First Opportunity Fund

reported it had sold its investment in

Monarch Wine Marking Services Pty Limited

and Monarch Trading Pty Ltd for a total of

$1.4 million. On February 5, the fund reported

it had sold its investment in King Valley Wines

for $180,000 and had received repayment of

a loan to the company of $280,000. This sale

realised a loss of about $100,000.

First Opportunity Fund reported a profit

of $164,820 for the 2009 financial year,

equivalent to 1.63 cents per share, a modest

improvement on the prior year’s profit of

$135,626 or 1.34 cents per share.

In a difficult year for the wine industry in

2009, King Valley Wines made a substantial

loss but Monarch achieved good results in

contract winemaking and storage, offset by a

difficult year in wine trading.

During the 2009 financial year, First

Opportunity evaluated more than ten

investment opportunities, according to

chairman John Keniry, and made firm offers

for four without success.

First Opportunity Fund now plans to

distribute to current shareholders, by way

of reduction of capital, $1.3-$1.5 million in

cash. This will leave the company, before the

exercise of current options, with $5 million

in cash ahead of the acquisition of Vocus.

Exercise of all current options would boost

the fund’s cash to $6 million.

The reduction in capital is being

implemented to ensure that immediately

prior to the issue of new shares under the

capital raisings, the value of shares on issue

will be 50 cents, the deemed issue price of

shares issued to the Vocus shareholders.

Vocus, which was founded in March 2008,

provides telecommunications services to

internet services providers such as iiNET,

gotalk, Internode, TransACT and BigAir.

Vocus has achieved rapid growth.

The company recorded a pre-tax profit

of $950,000 in financial year 2009

and is forecasting $4.39 million for the

current year.

Once final determinations were issued, the

government would take advice from the ATO

and Treasury before deciding whether any

policy action would be necessary.

10 yEARS AGO...MAy 2005SEEk SUCCESS SEES RETURN OF THE INTERNET

Online recruitment portal SEEK, the

biggest technology based venture capital

backed IPO since the tech-wreck, listed on

April 19 at a 2.3 per cent premium to its

subscription price of $2.10.

An initially subscribed market cap of

$587 million had risen steadily at the time

of writing to around $662 million, or a

share price of $2.37.

Top-20 shareholders included the

founders, along with major backers the

Packer family (25.02 per cent) and Yahoo

Inc (5.2 per cent). The only individual listed

in the top 20 was a Mr Roger William Allen

who held 1.06 per cent.

A total of 279.6 million shares were on

issue, including 11.9 million new securities.

71.05 per cent of the stock remained in the

hands of the top-20 investors.

$162.3 million was raised in the IPO,

$137.3 million of which was used to buy

back 65.4 million shares, with a further $25

million raised for working capital.

The successful initial public offer is the

most outstanding event for a venture

backed early stage technology company

since the technology crash of 2000.

20 yEARS AGO... MAy 1995CATALyST IN $7M MBO

Geelong based textile manufacturer, Filigree

Textiles Pty Ltd, has been purchased by its

management and the Catalyst Management

Buyout Trust for $7 million.

The acquisition was funded

predominantly by the National Australia

Bank, with a combination of mezzanine and

equity finance from Catalyst.

The management team, comprising

managing director Bruce Jessen, financial

director Peter Dangerfield, and national

sales director Wayne Leslie, owns 35 per

Australian Private Equity & Venture Capital Journal MAY 2015 · Year 24 No 252 | 25

REARVIEW MIRROR

* To access all editions of Australian Private Equity & Venture Capital Journal since July 1992, convert to our Archive Subscription. Short term – 30 day – Archive Subscriptions are also available.

cent of the company’s equity with the

remainder held by Catalyst.

The previous owner of Filigree, UK public

company Basford Home Textiles Fashion

Group, decided to sell its international

operations due to financial pressures.

As is customary in the UK, Basford first

approached the managing director, Bruce

Jessen, to gauge his interest in an MBO.

Through his bankers, National Australia

Bank, Mr Jessen was refered to Catalyst.

Mr Jessen said “Catalyst were very

professional and responsive. Within a few

days of our official meeting they priced

and structured the deal and the entire

transaction was completed in ten weeks.”

Mr Jessen established Filigree Textiles in

Australia in 1990 as a greenfields operation

to service Australia and Asia for Basford.

As a new market entrant, Filigree

invested in the latest lace technology which

enabled the company to achieve three

shifts per day, seven days a week.

Filigree Textiles operates a fully

integrated business from its 4,500 square

metre site with knitting, sewing, packaging,

warehousing, distribution, marketing and

sales functions on site.

The firm’s products are sold through

department stores, specialist stores and

owner-operator curtain makers and

installers.

With a strong market position in

Australia, “We are now looking at the South

East Asian markets for future expansion,”

said Mr Jessen.

Catalyst director, Ian Lansdown, said the

combination of an excellent management

team and the solid financial results

achieved since foundation made Filigree

“particularly attractive”.

“Filigree quickly achieved a 25 per

cent market share and a high level of

profitability after start-up losses,” he said.

Mr Lansdown and the three management

partners form the company’s new board.

Australian Private Equity & Venture Capital Journal MAY 2015 · Year 24 No 252 | 26

COMING EVENTS

5-7 MAY

CEBIT.

Sydney. Hannover Fairs Australia.

www.cebit.com.au

6-8 MAY

DEVELOPING A CORPORATE CREDIT

RATIONALE.

Sydney. S&P Capital IQ.

http://spciqevents.com/APAC_SPCIQ_

RDE_CCR_15May_Sydney_Landing_Web?e

lq=2fddd718d6274af3a7cee67e6588de71&e

lqCampaignId=1845

7 MAY

AVCAL GROWTH FUNDS DINNER 2015.

Sydney. AVCAL.

www.avcal.com.au/events/event/avcal-

growth-funds-dinner-2015

21-22 MAY

AUSTRALIAN SMART COMMUNITIES

SUMMIT.

Gold Coast. Australian Smart Communities.

www.australiansmartcommunities.org.au

22 MAY

CONNECTING WOMEN IN

BIOTECHNOLOGY LUNCHEON.

Melbourne. BioMelbourne Network

www.biomelbourne.org

22 MAY

PRIVATE EQUITY LUNCH.

Brisbane. Turnaround Management

Association Australia.

www.turnaround.org.au/whats-on.php

25-29 MAY

AUSTRALIA-CHINA BUSINESSWEEK

2015. Guangzhou and Hong Kong. ABF

Events.

www.ABF.Events

Email: info@abf.events

22 OCTObER

NZVCA Conference 2015. Queenstown,

New Zealand. NZVCA.

www.nzvca.co.nz

2 JUNE

FOCUS ON SIGNIFICANT INVESTOR

VISA.

Sydney. AVCAL.

www.avcal.com.au/events/event/avcal_

focus_on_siv

2-3 JUNE

LIMITED PARTNER SUMMIT.

London. AltAssets

www/altassets.net/events

17-18 JUNE

AGILE AUSTRALIA 2015, THE ART OF

SIMPLICITY.

Sydney. Slattery IT.

www.slatteryit.com.au

19 JUNE

SPORTS LUNCH SUPPORTING SPECIAL

OLYMPICS AUSTRALIA.

Sydney. Turnaround Management

Association.

www.turnaround.org.au

20-21 JULY

ASIAN VENTURE CAPITAL JOURNAL

PRIVATE EQUITY AND VENTURE

CAPITAL SINGAPORE FORUM.

Singapore.

www.avcjsingapore.com

3-4 SEPTEMbER

NATIONAL CONFERENCE.

Perth. Turnaround Management

Association Australia.

9-10 SEPTEMbER

AVCAL ALPHA CONFERENCE.

Melbourne. AVCAL.

www.avcal.com.au/events/event/

avcalalphaconference201

Australian Private Equity & Venture Capital Journal MAY 2015 · Year 24 No 252 | 27

ShARE ChART

LAST SALE AT END OF MONTH AUSTRALIAN LISTED PRIVATE EqUITy FUNDS/ INVESTMENT COMPANIES

INVESTORS/ MONTH Apr-15 Mar-15 Feb-15 Jan-15 Dec-14 Nov-14 Oct-14 Sept-14 Aug-14 Jul-14 Jun-14 May-14 Apr-14

PRIVATE EqUITy & VENTURE CAPITAL FUNDS/ INVESTORS

A1 Investments & Resources (ASx: AyI)

0.001 0.001 0.001 0.001 0.001 0.001 0.001 0.001 0.001 0.001 0.001 0.001 0.001

Acrux (ASx: ACR) 0.890 0.820 1.115 1.520 1.520 1.175 1.315 1.085 1.540 1.975 1.835 1.005 0.870

APN Outdoor Group (ASx: APO) (quadrant Private Equity)

3.230 3.240 2.890 2.650 2.650 2.510 2.500

Appen (ASx: APx) (Anacacia Capital)

0.710 0.610 0.680 0.565 0.565

Arowana Australian Opportunities Fund (ASx: AWq)

0.900 0.940 0.970 1.000 1.000

Arowana International Ltd (ASx: AWN)

0.720 0.805 0.900 0.940 0.940 0.930 0.980 1.000 0.985 0.98 0.915 0.902 0.900

Authorised Investment Fund (ASx: AIy)

0.032 0.032 0.025 0.025 0.025 0.025 0.025 0.025 0.025 0.028 0.028 0.025 0.020

Biotech Capital (ASx: BTC) 0.110 0.130 0.100 0.095 0.095 0.085 0.081 0.077 0.051 0.051 0.026 0.025 0.020

Billabong International (ASx: BBG) (Centrebridge Partners/ Oaktree Capital)

0.620 0.600 0.615 0.635 0.635 0.685 0.650 0.685 0.700 0.54 0.535 0.500 0.485

Blue Sky Alternatives Access Fund (ASx: BAF)

1.050 1.100 1.060 0.970 0.970 0.960 0.975 0.950 0.960 0.980 0.990 0.990

Blue Sky Alternative Investments (ASx: BLA)

4.350 4.110 3.790 2.880 2.880 2.680 2.810 2.800 2.890 2.870 2.910 2.950 2.500

BPH Energy Ltd (ASx: BPH) 0.004 0.004 0.004 0.006 0.006 0.007 0.008 0.007 0.011 0.010 0.009 0.008 0.009

Burson Group (ASx: BAP) (quadrant Private Equity)

3.360 3.220 2.700 2.400 2.400 2.340 2.430 2.380 2.500 2.300 2.240 2.120 1.940

Calibre Group (ASx: CGH) (First Reserve)

0.230 0.240 0.230 0.300 0.300 0.280 0.345 0.380 0.370

Chandler Macleod (ASx: CMV) (Lazard Australia Private Equity)

Exited Exited Exited 0.535 0.535 0.320 0.335 0.360 0.385 0.415 0.330 0.330 0.335

ClearView Wealth (ASx: CVW) (Crescent Capital)

0.995 1.035 1.045 0.900 0.900 0.920 0.935 1.070 1.075 0.885 0.800 0.800 0.820

Cover-More Group (ASx: CVO) (Crescent Capital)

Exited Exited Exited Exited Exited Exited Exited Exited 2.180 2.270 1.825 1.885 2.380

CVC Limited (ASx: CVC) 1.500 1.550 1.490 1.430 1.430 1.470 1.405 1.520 1.500 1.440 1.490 1.420 1.250

Dick Smith Holdings (ASx: DSH) (Anchorage Capital)

Exited Exited Exited Exited Exited Exited Exited Exited Exited 2.280 2.020 1.960 2.150

Disruptive Investment Group (ASx: DVI)

0.012 0.010 0.011 0.015 0.015 0.009 0.010 0.009 0.012 0.008 0.010 0.014 0.016

Eclipx (ASx: ECx) Ironbridge Capital

2.740

Energy Developments (ASx: ENE) (Pacific Equity Partners)

7.170 7.000 6.300 5.260 5.260 5.290 5.200 5.490 5.390 5.150 5.000 5.190 5.060

Grandbridge (ASx: GBA) 0.025 0.036 0.036 0.064 0.064 0.035 0.035 0.032 0.040 0.044 0.044 0.033 0.060

Greencross (ASx: GxL) (TPG) 6.650 8.340 9.290 7.620 7.620 7.620 8.470 8.600 9.800 10.000 10.400 9.240

Healthscope (ASx: HSO) (Carlyle Group/ TPG Capital)

2.840 3.000 2.930 2.650 2.650 2.650 2.560 2.540 2.440 2.240 2.260

Infratil (ASx: IFZ) 2.990 2.800 2.800 2.350 2.350 2.350

Invigor Group (ASx: IVO) 0.088 0.070 0.077 0.053 0.053 0.069 0.072 0.080 0.073 0.090 0.100 0.035 0.040

iSentia Group (ASx: ISD) (quadrant Private Equity)

3.570 3.600 3.350 2.820 2.820 2.820 2.890 2.900 2.940

Continued ➤

Australian Private Equity & Venture Capital Journal MAY 2015 · Year 24 No 252 | 28

ShARE ChART

iSonea (ASx: ISN) (Bioscience Managers/ Triton Inc)

0.100 0.105 0.062 0.010 0.010 0.069 0.076 0.079 0.085 0.175 0.210 0.235 0.180

Lion Selection Group (ASx: LSx) 0.170 0.200 0.225 0.250 0.250 0.200 0.250 0.300 0.310 0.395 0.350 0.300 0.400

Mantra Group (ASx: MTR) (CVC Asia-Pacific UBS)

3.600 3.400 3.240 2.800 2.800 2.680 2.780 2.370 2.340 2.060 1.960 1.800

Metro Performance Glass (ASx: MPP NZx: MPG) (Crescent Capital)

1.840 1.755 1.755 1.780 1.780 1.750 1.800 1.790 1.700 1.590

Monash IVF Group (ASx: MVF) (Ironbridge Capital)

1.570 1.620 1.400 1.305 1.305 1.410 1.395 1.375 1.730 1.650 1.745 1.765

NSx Limited (ASx: NSx) 0.950 0.080 0.070 0.074 0.074 0.074 0.130 0.130 0.130 0.067 0.100 0.100 0.115

Oceania Capital Partners (ASx: OCP)

1.250 1.335 1.255 1.385 1.385 1.385 1.275 1.380 1.450 1.440 1.500 1.370 1.450

Osprey Medical (ASx: OSP) (CM Capital/ Brandon Capital/ kinetic Investment Ptnrs)

0.690 0.655 0.600 0.500 0.530

Pioneer Credit (ASx: PNC) (Banksia Capital)

1.650 1.960 1.970 0.510 0.510 0.500 0.550 0.570 0.580 0.570

qRx Pharma (ASx: qRx) (Uniseed)

0.017 0.016 0.180 1.870 1.870 1.750 1.800 1.710 1.790 1.600 1.560 1.580

q Technology Group (ASx: qTG) (Helmsman Capital)

0.008 0.005 0.010 0.021 0.021 0.017 0.019 0.019 0.023 0.029 0.750 0.080 0.095

SpeedCast International (ASx: SDA) (TA Associates)

2.620 2.620 2.140 1.850 1.840 1.880 1.97 2.050 2.050

Spotless Group (ASx: SPO) (Pacific Equity Partners)

2.280 2.300 2.010 1.880 1.850 1.745 1.88 1.960 2.060 2.010

Techniche Limited (ASx: TCN) 0.082 0.081 0.083 0.084 0.760 0.079 0.075 0.085 0.890 0.088 0.770 0.064 0.650

xero (ASx: xRO) (Valar Ventures/ Matrix Capital)

19.020 23.750 24.010 14.740 14.750 15.700 13.990 19.130 22.780 23.270 24.110 30.000 28.980

FUNDS OF FUNDS

IPE Limited (ASx: IPE) 0.295 0.295 0.320 0.305 0.321 0.310 0.355 0.345 0.395 0.445 0.495 0.480 0.460