Australia’s PEP raises close to A$850m

Tim Sims’ firm expects a first close imminently, anticipating a number of last minute commitments.

Australian private equity firm Pacific Equity Partners has raised between A$800 million ($742 million; €536 million) and A$850 million for its fifth vehicle, a source with direct knowledge of the matter told Private Equity International.

The fund is expecting a first close within the next two weeks, with anticipated last minute commitments taking the vehicle to a potential A$1 billion or slightly more, however the firm is currently still in the process of singing final documents with some LPs.

Media previously reported the fund had already made a first close on A$1.1 billion, however PEI’s source close to the firm said hard commitments of up to A$850 million have been received so far.

Nevertheless, the firm is likely to exceed the flat A$800 million it expected to reach at the first closing, although a little later than originally hoped. A source earlier revealed to PEI in February that the vehicle expected to raise that amount by the end of March.

The fund is targeting A$2 billion in total – smaller than its A$2.7 billion predecessor – and will have a co-investment tranche. The carve-out for co-investments with its LPs does not have a set number, but it has been said by people with involvement in the fund that it will reach around A$1 billion.

“The feedback from investors is that the desire to co-invest alongside the fund is strong and so part of shaping the size of the fund has been driven by that,” one source explained earlier.

PEP distributed A$1.6 billion to investors during 2013, about A$1 billion of which happened in the final quarter of the year.  Distributions came from refinancing The Spotless Group and Peter’s Ice Cream, as well as selling around 50 percent of share-registry business Link Group to a consortium including Macquarie Group and Intermediate Capital Group for an undisclosed sum.

PEP is an Australian private equity firm set up by a group of former Bain & Company executives. It has about A$6 billion in assets under management and has made 23 investments since its founding.