Quadrant expects another ‘one-and-done’ on ninth fund

The Sydney-based mid-market firm expects to hold a final close on more than $760m by the end of the year, Private Equity International has learned.

Quadrant Private Equity is gearing up for another quick fundraise less than a year since it held a A$980 million ($746 million; €660 million) final close on its previous vehicle.

The Sydney-based mid-market manager is targeting A$1 billion for its ninth offering, Quadrant Private Equity No. 6. The firm is in talks with investors and expects to hold another “one and done” by Christmas, Chris Hadley, Quadrant executive chairman, told Private Equity International.

The fund launch was first reported by The Australian Financial Review.

The vehicle will be larger than its predecessor, which closed in August 2016 after less than two months in market.

“We’ll keep it to around A$1 billion. To us deployment of capital is more important than fund size,” Hadley said. “We can raise a much larger fund – there’s certainly a lot of demand – but it would push us out of the middle market that we are focused on. For us, velocity and deployment of capital as well as absolute return is more important than a large fund.”

Hadley added the firm does not expect any major change in its investor base and that a few new investors have signified interest in the fund.

Limited partners in Quadrant’s previous funds include State Teachers Retirement System of Ohio, AustralianSuper and UniSuper, according to PEI data.

Capital from Fund No. 5 is almost fully deployed and the firm is completing its last investment from the vehicle. The portfolio includes investments in radiology clinic QScan, automotive dealership Peter Warren, as well as Fitness and Lifestyle Group and Experience Australia.

The firm has also been busy exiting investments from A$850 million Fund No .4. In
October Quadrant sold its stake in Real Pet Food Company for A$1 billion to a consortium of investors including Chinese private equity firm Hosen Capital, New Hope Group and Temasek.

In May it sold ICON Cancer Care for A$1 billion to a group of investors including Queensland Investment Corporation, Goldman Sachs Private Equity and China’s Pagoda Investment. It also sold its stake in Canberra Data Centres last year to Australian pension fund Commonwealth Superannuation Corporation and New Zealand-based infrastructure and energy investment group Infratil for A$1.1 billion

With these three transactions, the firm has returned all investors’ capital from Fund No. 4 plus returns, Hadley said.