Sydney-based private markets investment firm Roc Partners has set up a private equity vehicle for high-net-worth individual (HNWI) investors.
The Roc Summit Private Equity Fund is intended to provide access to a diversified portfolio of, primarily Australian and New Zealand, private equity investments.
The fund, which will target net annualised returns of 12-15%, will have an open-ended ‘evergreen’ structure unlike conventional closed-end private equity funds which operate for specified terms, usually 10-12 years with capacity for 1-2-year extensions.
The Roc Summit fund will allocate capital across primary and secondary fund investments as well as to direct opportunities such as co-investments. The aim will be to build exposure to a diversified portfolio of more than 100 private companies.
Announcing the new strategy on 25 March, Roc said it had identified a potential seed asset “with characteristics adhering to Roc Partners’ risk adjusted return profile”.
The asset was “well diversified by company and sector, it would provide investors with a differentiated and well-rounded exposure to Australian and New Zealand economies”, Roc said.
The “potential seed asset” is believed to be the secondary purchase of a superannuation fund’s private capital investments across multiple private capital funds in Australia and New Zealand. Typically, such secondary sales are agreed at significant discounts to book value.
Group managing partner Michael Lukin said: “Roc Partners’ extensive experience and long-standing track record in Australian and New Zealand private equity markets has provided the foundation for launching Australia’s most diversified evergreen private equity fund. We’re excited to bring this opportunity to wholesale investors, offering them a rare opportunity to access a highly curated and well-balanced portfolio of private equity investments.”
Lukin said Roc Summit would enable high-net-worth investors to access the sort of private equity opportunities once only accessible to large institutional investors.
Those investors are increasing in numbers and wealth.
Lukin noted that Capgemini’s 2024 World Wealth Report highlighted a 7.9% growth in Australia’s high-net-worth investor segment in 2023, far exceeding the global average growth of 4.7%.
Meanwhile, the Australian Investment Council’s 2024 Private Capital Yearbook revealed a shift in the source of private capital over recent years. Institutional investors’ share of private equity investment had fallen from 47% in 2019 to just 20% in 2023, while family office participation had surged from 7% to 36%.
The fall in institutional investor investment in private equity in Australia is largely a result of superannuation funds ceasing to invest in funds in response to the APRA performance test and requirements for fee transparency. At the same time, many larger superannuation funds have increased direct investing in the sector globally.
Roc Partners had $9 billion in funds under management or advice on 31 December.
Image: Roc Partners group managing partner Michael Lukin.