Fund Raising Watch - #3

It has been a year since I wrote a piece called Australian Survivor . . . Fund Raising Watch.

At that time there were about ten Australian or New Zealand PE firms in the market seeking to raise a fund.  They included:

1. CHAMP
2. Direct Capital
3. Anchorage
4. Gresham Private Equity
5. Tasman
6. Mainridge
7. Propel
8. Harbert Australia
9. Pinnacle Private Equity
10. AMP Private Equity

So how has it played out?  Was the 2009/2010 fund raising vintage as challenging as I feared it would be? 

Sadly, it was actually even worse.  Just three of the firms, CHAMP, Direct Capital and Anchorage, successfully closed new funds.  Hooray!  Well done guys. 

For the others it's been an ugly twelve months and some must be facing tough decisions.  It's well known that AMP Private Equity and Mainridge are managing out their portfolios and exiting the industry.  And I hear that Propel has formally suspended their fund raising activities.  

Will 2010/2011 be any brighter for private equity fund raising?  At the moment it's very quiet out there.  Allegro is trying to raise $200m and off the back of their success with the ABN AMRO portfolio will probably succeed.  Clark Perkins' Mercury Fund is seeking $100m from high networth individuals and has already reached a first close thanks to strong New Zealand support.  And Blue Sky Private Equity has recently kicked off a $50m raising. 

The real test will come in the fourth quarter when a number of "franchise" firms return to the market for new capital.  These are expected to include:  Ironbridge, Quadrant, Champ Ventures, and Crescent Capital.

Comments

[Keyser Söze]

Mark Wilson and the team from the recently shut down Goldman Sachs JB Were private equity group are also planning to have go at raising a fund.

[GP]

Keyser,

Not sure if your gossip is accurate but ... I LOVED you in The Usual Suspects.

[Slowhand]

God I hope they don't have another go. The two man guys that ran it both buggered off and are now competing over the good track record, and both blaming each other for the bad. Call it a day for principal investment, GSJBW.

[Craig]

Might be a stupid question but for the uneducated can you please elaborate what is meant by a "franchise" firm.

[GP]

Craig,

By "franchise" I mean firms that are not first time managers, but instead have a well-established investment track record and can demonstate team continuity--the guys that built the track record are still there.