Wolseley plots $300m Australia fund

The Sydney-based firm expects to see more international LPs in its third private equity vehicle, while it actively exits its portfolio.

Wolseley Private Equity will launch its third private equity fund before the end of the year, James Todd, managing director at the firm, told Private Equity International. The firm will target A$300 million (€210 million; $280 million) for the vehicle, which will focus on opportunities in Australia and New Zealand. 

Wolseley expects to increase international investors in its third vehicle. Fund II, a $235 million vehicle with a 2008 vintage, is almost fully invested and had a majority of its commitments from domestic LPs. The firm's debut fund, which has a 2004 vintage, raised capital solely from domestic LPs.

As more domestic LPs look abroad for fund investments, US and Asian LPs in particular are looking at Australia for opportunities.

James Todd, managing director, Wolseley PE

Todd explained that to become a long-term private equity firm, it is essential to develop deep relationships with international LPs.

He added that as more domestic LPs look abroad for fund investments, US and Asian LPs in particular are looking at Australia for opportunities.

The third vehicle will invest in companies with enterprise values of between A$30 million (€21 million; $28 million) and A$100 million, but is sector agnostic. Todd said the private equity landscape has become extremely segregated, offering a real opportunity in the $300 million fund-size space. 

Wolseley will not offer fund incentives to investors, believing the firm will not need to despite a tough fundraising environment in Australia. 

Earlier this month, Wolseley sold Guardian Childcare Alliance to Navis Capital Partners, according to the firms. A source close to the matter said the $120 million sale generated a 2.3x exit multiple and 41 percent IRR for Wolseley. 

The firm is also expecting to make a healthcare investment in the short-term, which will be its penultimate deal from Fund II.