VPESO will only invest in secondary Private Equity investments and co-investment opportunities focused on the lower to mid-market Private Equity segment in Australia and New Zealand which has consistently delivered strong returns to investors
This selection criterion enhances the likelihood of VPESO′s Investment Portfolio itself achieving Top Quartile returns. A comprehensive and rigorous system for the screening of fund managers for investment has been developed by the Investment Manager, a summary of which is outlined below.
The Investment Manager makes recommendations to the investment committee of the Fund to make Commitments and invest in unlisted Private Equity funds whose managers and funds typically meet the following criteria.
Manager Selection Criteria
- focus on investing within a specific region within Australia;
- strong local market knowledge and presence;
- focus on lower to mid-market later expansion or buyout sectors;
- comprehensive strategy and criteria for industry sectors and investment type.
- active management style of underlying investments;
- transparent monthly, quarterly and annual reporting to investors;
- fund independently audited on an annual basis;
- tax effective fund structure.
- core fund, executive team, have worked in current or previous private equity fund for a minimum of 5 years
- more than 50% of investment from previous fund, in existence for at least 5 years, have been exited or realised
- track record of delivering strong returns from chosen investment strategy
- top quartile investment performance from previous fund
The underlying fund selection and investment process that the Investment Manager systematically adheres to for its management of VPESO′s Private Equity portfolio is illustrated in the following figure:
Out of the universe of Australian Private Equity funds, the Investment Manager expects to evaluate a considerable number of secondary investment opportunities that ultimately should result in acquisitions in up to eight to twelve Secondary Private Equity funds and co-investments at any one point in time.
When fully invested VPESO will have ultimately hold a share in up to 50 underlying private equity company investments, providing a well-diversified portfolio of profitable, private company investments, across a range of industry sectors.
