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CHAMP closes second fund on A$950m

The Sydney-based buyout firm has A$950m of fresh capital at its disposal after a fundraising that saw the firm successfully target European investors for the first time.

CHAMP Private Equity (CHAMP), the Sydney-headquartered buyout firm focused on investments in Australia and New Zealand, has closed its latest fund, CHAMP II, on A$950 million ($730 million; €598 million). The final closing, which was capped, beat an initial fundraising target of A$750 million.

Paul Wilson, director, CHAMP 

CHAMP was formed as a joint venture in 2000 that brought together the skills and networks of Australian Mezzanine (AMIL), an Australian private equity firm formed in 1987 by Bill Ferris and Joseph Skrzynski, and Castle Harlan, the US mid-market buyout firm. CHAMP I, the firm’s first fund, closed on A$500 million in 2000.

The latest fundraising was advised by London- and New York-based MVision Private Equity Advisers, which acted as global primary placement agent, and Sydney-based Brookvine Pty Limited, which acted as special adviser.

CHAMP II brought in 40 institutional investors, with one-third of funds raised emanating from Australia, one-third from the US, and one-third from Europe, Asia and the Middle East. The firm successfully sought European investors for the first time, with commitments elicited from Belgium, France, the Netherlands, Switzerland and the UK. Paul Wilson, a director at CHAMP, informed Private Equity International that these investors included the likes of AlpInvest Partners, AXA Private Equity, Gartmore and Swiss Re.

The fundraising was also notable for having extracted a commitment from Japan’s Mizuho Bank, which Wilson said was understood to be the first investment made by a Japanese institution in an Australian buyout fund.

There was strong interest in Asian private equity from institutions in Europe and the US, but we found a lot of them had reservations about some parts of Asia

Paul Wilson, director, CHAMP Private Equity

Wilson said: “There was strong interest in Asian private equity from institutions in Europe and the US, but we found a lot of them had reservations about some parts of Asia. They were especially attracted to Australia because of its stability, democratic government, high levels of governance, plus a strong economy and sophisticated debt market.”

He added that investors liked CHAMP’s ability to invest in Australian businesses before looking to expand them into neighbouring Asian territories. This so-called “step out” strategy combined the “stable base” of the Australian market with the strong growth potential of certain Asian countries. He cited the example of Penrice from the firm’s first fund, an industrial chemicals firm that initially had no exports, but which under CHAMP’s ownership ended up with 50 percent of its bicarbonate soda sales in Japan.

“Almost all” commitments obtained by CHAMP II from the Australian market came from superannuation funds, which dominate institutional private equity investment in Australia. A small proportion was committed by funds of funds and family offices.