CHAMP invests A$80m in Australian wealth advisory

The deal is likely the Australian private equity firm’s final investment from its second fund. It is currently raising A$1.5bn for its third fund, aiming for a first close in April.

Sydney-based CHAMP Private Equity has invested A$80 million ($52 million; €41 million) for a 75 percent stake in Centric Wealth, an Australian wealth advisory firm.

The transaction is “unlike a typical leverage buyout”, in that it “will both simplify and delever the balance sheet of the business, positioning it with financial support to execute its strategy”, according to a joint statement from CHAMP and Centric Wealth.

Centric Wealth’s management now holds 12 percent of the company, with the remaining 13 percent held by foundation investors. The company’s existing management will be retained.

CHAMP expects continued performance from the company, “underpinned by diversified earnings, strong client retention, recurring income streams and low gearing in client portfolios,” David Jones, the firm’s managing director, said in a statement.

The investment, which was made out of the A$950million CHAMP II, is likely to be the fund’s last, said a spokesman for the firm. Although the firm is retaining significant capital for strategic and add-on initiatives for the fund’s existing portfolio companies, he added.

The firm is currently in the market with CHAMP III, which is raising A$1.5 billion fund and expects to hold a first close this April. Like its predecessors, the fund is focused on mid-market buyouts in Australasia but will consider investment opportunities in Southeast Asia. 

Founded in 2002, Centric Wealth has approximately A$5 billion in assets under management and 63 advisers. It serves clients in Sydney, Melbourne, Brisbane and Canberra.