Five V Capital’s deal makers chase $700m for fifth buyout fund
Adrian MacKenzie and Srdjan Dangubic at Five V Capital are donning the hard hat to raise $700 million for their fifth buyout fund, two years after they drummed up $500 million-plus for its predecessor.
Srdjan Dangubic from Five V Capital. AFR
Street Talk can reveal Five V has begun meeting with institutional and high-net-worth investors to come in as limited partners on its Fund V. It is targeting $400 million at first close by Christmas with room to go up to $770 million for the final close.
Prospective backers are being told to think about making 3.7 times their money in 2.9 years on realised investments – which is the firm’s track record on its seven exits across its seven-year history. That equals 63 per cent IRR.
The hottest one, Universal Store, made Five V’s backers 111.5 per cent IRR or 6.2 times their money to within 2.8 years. The worst exit, Unified Healthcare Group, made just 4.8 per cent IRR and 1.1 times money after 2.2 years, according to the flyer.
Of note, Five V weeded out any mentions of now-defunct “AI marketing software” business Metigy, which the PE firm recorded as being worth $1 billion in April 2022.
As we all now know, Metigy CEO David Fairfull admitted to forging bank statements, falsifying earnings, overstating credibility of its product, and buying two luxury properties using company cash – wiping out the $105 million that Five V thought its stake was worth.
Everyone makes money
But Metigy – and an early bet on Canva aside – Five V’s got the sort of returns that make rival PE firms jealous. It would have its fingers crossed its track record is enough to convince investors to loosen their purse strings amid a broader drought in fundraising.
The strategy is the same as earlier mid-market business in Australia, and more recently, in New Zealand with a $50 million to $300 million enterprise valuation. It loves bolt-ons, having done 27 such deals across its history, as well as co-investments.
The flyer was at pains to say Five V’s deal makers have tipped in more than 10 per cent of the firm’s total $1.5 billion-plus investment capital. It added executives of its exited investments had been “awarded” more than $100 million of equity.
In addition to the founding duo, Five V’s private equity leadership is Tim Cooper from Macquarie; Justin England, formerly of Pemba Capital; Chris Adams, who has worked at Adamantem, Anchorage and Bain; Angus Whitehead from Marwyn Capital and Murray Schnuriger from PwC. Another unnamed senior deal maker is set to join from Macquarie by the end of the year.
It has had two exits this year. At shipping services group Monson Agencies, it booked a 2.4-times return or 31 per cent IRR after holding the investment for 2.2 years. At performance management software, Totara Learning Solutions, it made 2.6-times money in 3.3 years when it sold its majority stake to European technology investor Tenzing.
Introducing your Newsfeed
Follow the topics, people and companies that matter to you.
Find out more