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
AUSTRALIAN PRIVATEEQUITY HANDBOOK
THE fIRST PROfESSIONAL PRAcTISE gUIDE SPEcIfIcALLY fOR THE AUSTRALIAN PRIVATE EQUITY INDUSTRY IS NOw AVAILABLE DIREcTLY fROm PRIVATE EQUITY mEDIA.
Order Australian Private Equity Handbook by Nick Humphrey (CCH Australia Limited RRP $95.00 inc. GST) now.Simply visit: www.privateequitymedia.com.au and click on “Subscribe” in the green toolbar to buy online. Australian Private Equity & Venture Capital Journal subscribers qualify for a special discount price of $85.00 inc. GST. We will mail your hard copy book as soon as your payment is processed.Australian Private Equity Handbook is a plain English guide to professional private equity practise in Australia covering major aspects of deal making and the establishment of a private equity fund.
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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: [email protected]
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