Hastings Private Equity, the private equity arm of Hastings Funds Management, is planning to separate from its parent to establish Mainridge Capital.
The separation will occur once Mainridge has received over A$100 million ($64 million; €51 million) of commitments for its third equity fund, by the end of June 2009. The fund aims to raise at least A$150 million by then, according to Dominic Leary, chief executive of Mainridge.
Following the strategy of the first two funds, the third fund will also focus on lower mid market buyout and expansion capital opportunities in Australasia.
If the separation goes ahead, Mainridge will assume responsibility for the management of Hastings Private Equity’s existing two private equity funds, HPEF I and HPEF II, which have both been fully invested, the firm said.
Upon separation, Hastings Private Equity will not have any equity stake in Mainridge.
Established in 2001, Australia-based Hastings Private Equity focuses on late stage management buyouts, expansion and replacement capital deals ranging from $20 million to $150 million. It currently manages approximately $250 million in assets across two funds.
Hastings Funds Management is a wholly owned subsidiary of financial services company Westpac Banking. It manages funds invested in private equity, infrastructure, high yield debt and timber and has more than A$5 billion in funds under management.
Just last week, fellow Australian firm Allco Equity Partners terminated its management agreement with its parent company, which had applied for receivership. However, the receivers have disputed the validity of Allco Equity’s spin-out in a case that is still pending in court.