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:
- Direct Capital
- Gresham Private Equity
- Harbert Australia
- Pinnacle Private Equity
- 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.