Anchorage makes maiden investment

Australia’s Anchorage Capital Partners has acquired Hans Continental Smallgoods – the first investment from its maiden A$200m fund, which has held a first close on A$100m, and its second in the food sector.

Anchorage Capital Partners, a newly established special situations private equity firm, has acquired Australian small goods manufacturer Hans Continental Smallgoods from Japan Tobacco for an undisclosed sum.

The investment was made from Anchorage Capital Partners I, the firm’s A$200 million ($166 million; €115 million) debut fund, which has raised A$100 million for the first close. The fund is expected to see a second and final close at the end of November this year. It will focus on investments in Australia and New Zealand and will also commit to a few deals elsewhere in Asia.

Established in 1960, Hans’ product range includes bacon, ham and fresh meat products. The company has three main processing units and is headquartered in Brisbane. This is Anchorage’s second investment in the food sector. Last year, the firm made a proprietary investment of A$35.5 million in Golden Circle, an Australian canned fruit, juice and jam manufacturer, for a 35 percent stake.

Anchorage Capital seeks to invest between in companies with enterprise values of between A$50 million and A$150 million, said Mark Bayliss, a partner at the firm. The firm is open to making co-investments in companies with an enterprise value of between A$250 and A$300 million.

The firm will invest in special situations, but not in terminal businesses. Bayliss said that investments will be made in previous strong performers struggling presently, in “orphans” of large parent companies, and more generally in companies that are well established but underperforming due to mismanagement.

While the fund is largely sector-agnostic, it will primarily invest in businesses that have a substantial tangible asset base in sectors such as manufacturing, distribution and some service-based industries.

Anchorage Capital spun out from Interbank Capital Partners, the boutique investment firm founded by Philip Cave, who also owns a listed investment vehicle Reil Corporation and is a former executive director of Macquarie Bank.

The Sydney-based firm has four investment partners: Cave, Michael Briggs and Daniel Wong, all previously with Interbank Capital. Bayliss, on the other hand, was an investor in two private equity-funded management buyouts in the retail and advertising sectors respectively. Prior to that, he was chief financial officer of John Fairfax, an Australian publishing group.