Australian buyout major Pacific Equity Partners (PEP) has closed its sixth flagship fund, PEP Fund VI, at its hard cap of A$2.5 billion ($1.79 billion).
The final close for the middle-market buyout fund was held in July, the firm said on its website.
Limited partners include the New York State Teachers’ Retirement System, which committed A$200 million to the fund last year.
Ocorian, a corporate services firm specialising in fiduciary, fund administration and capital markets, acted as the fund administrator for the closing.
PEP Fund VI, with its parallel vehicles, will continue to invest in underperforming market leaders, predominantly in Australia and New Zealand, with the likelihood of significant co-investment opportunities, Ocorian said.
Its predecessor, PEP Fund V, closed in 2015 at A$2.1 billion ($1.5 billion). The fifth fund has so far exited three investments – Australia’s bakery products and ingredients provider Allied Pinnacle, consumer foods firm Manuka Health, and New Zealand-based education group ACG.
PEP funds target investments in companies with enterprise value between A$200 million and A$1 billion in industrial services, energy, consumer products, entertainment, big data and financial services.
In addition to the sixth buyout fund, PEP closed its Secure Assets Fund and related parallel vehicles in June 2020 at A$360 million.
The infrastructure fund recently upped its bid in acquiring Zenith Energy from A$1.01 per share to A$1.05 per share, valuing the power producer at A$259 million.
Established in 1998, PEP Fund I was the first LBO fund to be established in Australia and New Zealand. The firm says on its website that it currently manages A$4.9 billion in assets, having made 32 operating company investments and over 100 bolt-on acquisitions.
PEP seeks to achieve long-term average profit growth of 15-20 per cent and annual leveraged returns of 25-30 per cent.