Private equity firm Five V Capital’s brand new buyout fund is off and racing.
The Sydney-based firm, which ruled off a $350 million fundraising for its third fund earlier this year, has wasted little time putting the fresh capital to work.
Street Talk can reveal Five V has acquired funds ratings agency and research house Zenith Investment Partners, marking both its maiden foray into financial services and first deal out of Fund III.
It is understood the investment is all about capitalising on growth in the managed funds industry, where funds under management has risen around 11 percent annually for the past 30 years to now sit at $3.786billion, according to the Australian Bureau of Statistics.
Zenith, which has been around for almost two decades, is a way for Five V to tap into that growing market by buying a business that services the financial advisers that manage people’s money.
While the price paid for Zenith was not disclosed, Five V tends to write equity cheques in the $30 million to $60 million ballpark.
It is understood multinational law firm Clifford Chance advised Five V on the transaction, which was finalised last week.
Zenith’s main business is partnering with financial advice practices to provide them with research that they can then use to guide their clients.
The business rates more than 700 investment products and works with more than 140 financial practice clients across Australia. It also provides services such as helping advisers with their compliance structure and providing advisers with bespoke portfolios as either paper-based models or managed accounts.
The company was founded by David Wright and David Smythe in 2002.
Five V was an early backer of Australian tech unicorn Canva, but has about a dozen investments across its two other funds.
Other portfolio companies include health software business UHG, peer-to-peer lender RateSetter, education software company Education Perfect, payroll business Ascender and business process outsourcing company Probe Group.
Five V was set up by former CVC Capital dealmaker Adrian MacKenzie in 2013 and saw another ex-CVC private equiteer Srdjan Dangubic join as a partner in 2016.
The firm typically focus on investing in businesses with an enterprise value between$20million and$200million, where the firm can snare a ‘‘significant ownership’’ position alongside partners.
Across the three funds, Five V has more than $500 million in total assets under management.