A rash of raisings

Our story yesterday on a handful of new raising in the private equity sector barely scratched the surface. It seems funds everywhere are beating paths to the doors of institutional investors with cap in hand.

Apart from the planned raisings from Gresham Private Equity, Next Capital and Propel Investments, at least half a dozen others are also completing or about to launch raisings in the $200 million to $350 million range.

These include Wolseley Partners, which is seeking $200 million for its second fund, the Brisbane-based NBC Capital, which is targeting around $250 million, venture capital specialists Starfish Ventures (up to $200 million) and GBS Ventures, which is seeking money for its third fund. Several New Zealand buyout funds, including Direct Capital, are also tapping the market.

Hastings Private Equity is also planning to go to the market in the next three to six months for a new raising of about $250 million to $300 million. Its second fund of $180 million is nearly fully invested, and it has already exited three of its nine investments, achieving internal rates of returns of more than 50 per cent in each case.

Its latest sale was $6.5 million of convertible notes in G&S Engineering, a Perth-based mining services business. The sale returned 1.82 times the value of its 24-month-old investment.

Managing director Dominic Leary says despite the considerable changes in the market over the past six months, it is not too hard to find buyers, particularly where the asset can provoke the attention from trade buyers with a strategic interest. "But it would be challenging to go to a listed environment," he says.

Jon Schahinger, managing director of ING Private Equity Access, can attest to that. INGPeal, as it is known, was Australia's first listed fund that funnelled investments from the retail sector into buyout funds, but despite the success of recent exits from its portfolio of buyout funds, its securities are trading at a substantial discount to net asset value.

"We've had unrelentingly positive news, we haven't suffered anything significant in the portfolio and successful exits have continued," he says. "The investment pace in private equity has slowed but new deals are still getting done."