Australia-focused fund-of-funds manager Vantage Asset Management has launched fundraising for a new flagship fund, Vantage Private Equity Growth 6 (VPEG 6).
The fundraising is targeting sophisticated investors and small to mid-sized institutions.
Vantage says the new fund will follow the firm’s proven 20-year investment strategy; It will be invested in 8-10 top quartile performing private equity funds in Australia within the lower to mid-market segment, diversified across vintage year, managers, geography and financing stage.
Vantage has not stated a target figure for the fundraising, however, as at 31 December, the firm’s VPEG 5 fund had made investment commitments totaling $169 million.
To date, Vantage has invested in 31 underlying funds which in turn have invested in 169 companies of which 88 have been sold. Those exits have generated a 2.9x money multiple equating to an average gross internal rate of return (IRR) of 49.7% per annum.
Vantage notes that over the first quarter of 2024 private equity activity was elevated particularly in the lower to mid-market segment.
“The momentum comes off the back of strong broader tailwinds for Australia’s private sector as a desirable segment for both foreign and domestic sponsors to acquire high quality assets,” according to Vantage.
So far this year, five significant new investments have been made from private equity funds in which it is invested: Findex Group, from Mercury Fund Twenty2; Nutun Australia, Allegro Fund IV; Fyfe, Mercury Fund Twenty2; GlobeWest, Next Capital Fund V and Modus Projects, CPE Capital Fund 9.
According to Vantage, exit activity also continues to build with four portfolio companies of its investee funds having recently engaged sell-side advisers.
Cameron Partners has been engaged to prepare a two-part sale process for Mercury Capital Fund 2’s 71% stake in HQ Travel Group; RBC Capital partners to provide a strategic business review, including M&A or capital raising opportunities, for Advent Partners 2 Fund’s investment in Compass Education; MA Financial Group (ASX: MAF) and Moelis engaged to find bidders for Next Capital Fund IV’s investment in maintenance company Eptec Group and KPMG to find a buyer for Next Capital Fund 2’s investment in artisanal bakery business Noisette.
Vantage says it anticipates sales of these businesses over the next three to six months to provide “elevated” returns to current investors in its funds.
Ahead of its new fundraising, Vantage has added to its team: investment director Paul Capito, financial accountant Jack Leggott and head of private capital Joseph Rodriquez.
Image: Eptech Group’s engineering maintenance contracts include cleaning and painting the Australian Navy’s Collins Class submarines. A profitable exit of Next Capital’s investment in the company would flow on to returns for Vantage investors.