Crescent hits A$675m hard cap

The Australian mid-market firm completed raising its fifth vehicle after just 10 weeks in the market

Sydney-based Crescent Capital Partners has raised A$675 million ($557 million; €452 million) for its fifth Australia-focused private equity fund,after just 10 weeks in the market, Tim Martin, partner at Crescent, confirmed.

The fund, which launched in early September, will officially close in January, but has stopped taking commitments from investors already, having been substantially oversubscribed, Martin told Private Equity International.  

The A$675 million hard cap was a step up from the firm’s predecessor fund, which closed on A$490 million in 2012. While the firm could have raised significantly more, it said in a statement that it capped the vehicle “to ensure a continuation of the highly successful investment strategy deployed to date”.

Crescent typically targets businesses in certain sectors that expect high levels of profit growth. The firm intends to work closely with management to implement operational changes in its portfolio companies, its team all from a business management or strategic consulting background.

Exits in the past 12 months have included the IPOs of CoverMore, Lifehealthcare and Metro Performance Glass, as well as the sale of Davidson Trahaire Corpsych, which have on average returned 4 times their invested capital to investors. Crescent’s overall returns over the past 10 years and three funds have delivered a compound annual return of over 28 percent per year, according to the firm.

While enjoying a strong re-up rate from existing LPs, Crescent’s fund has also welcomed a number of new investors as the firm diversifies its LP base in favour of offshore capital, Martin explains.

Since Fund II, the firm has gradually moved from raising capital entirely domestically to garnering two-thirds of its commitments from international LPs in Fund V. Martin says the very deliberate move towards offshore investors is to attract the highest quality LPs globally, while decreasing the firm’s reliance on domestic LPs, many of which have been decreasing their allocations to private equity.

Crescent Capital Partners is a Sydney-based private equity firm investing in middle market companies located in Australia and New Zealand, generally with enterprise values between A$50 million and A$300 million. The firm was formed in 2000 by founder and managing partner Michael Alscher.