Pacific Equity Partners, an Australian private equity firm, has closed PEP Fund IV on A$4 billion ($3.7 billion; €2.3 billion), making it the firm’s largest fund to date.
The firm’s previous fund, PEP Fund III, had closed on A$1.3 billion.
Tim Sims, one of the founders of Pacific Equity Partners, told PEO the fund had a dry close for traditional investors at about A$3 billion in June last year, following which the firm decided to hold off fundraising till the remaining capital from fund III was committed.
The firm began bringing on board new investors for this fund following its acquisition of cinema operator Hoyts at the end of last year.
Sims said that while the investor-base for fund IV was still endowment-focussed as in the previous funds, it was more diversified this time around. The fund drew investors from the US, Europe, Middle East and from across Southeast Asia, he said.
The fund will retain the investment strategy of its predecessors and will focus on mid-market buyout deals in diverse sectors. It will invest in businesses that are based in Australia or New Zealand and have an enterprise value of between A$300 million and A$2 billion, said Sims.
He said the firm has enjoyed its best success in such businesses and that it sees a very deep market in this segment. However, a smaller fund would only allow it to invest in a few deals of this size, he added. A strong equity base was important for a firm, he said.
The capital deployed for the acquisition of the Hoyts Group last year was from across funds III and IV, making it fund IV's first investment.