Sydney-based Pacific Equity Partners (PEP), said to be Australia’s largest domestic buyout and venture capital player, is planning to raise a A$1 billion ($798.4 million) infrastructure vehicle.
The Australian Financial Review reports that the general partner (GP) is in early discussions with its existing base of limited partners (LPs) regarding the strategy and sources.
Founded in 1998, PEP invests in industrial services, energy, consumer products, entertainment, big data, and financial services in Australia and New Zealand.
The buyout fund, however, avoids investing in pre-profit businesses or vice businesses such as those operating in alcohol and tobacco sectors fields.
According to the firm, it seeks to invest at least A$100 million, unless it’s an add-on acquisition to an existing portfolio company, in companies having enterprise value between A$99.53 million and A$1 billion and exits its investment within three to six years.
The report claims that the PE firm wants to raise an A$1 billion fund targeting active infrastructure, operating as a hybrid of PE investments and infrastructure assets. PEP wants to apply its operational expertise from private equity to different asset classes.
The decision to launch the fund comes at a time when LPs are increasingly looking to deploy their capital into infrastructure projects as preferences shift.
A survey of LPs by Intralinks and Global Fund Media found that in 2016, overall total net inflows into alternatives was $669 billion; bringing industry-wide AUM to $4.46 trillion, with a preference by LPs for investments into technology, healthcare and infrastructure.