US middle-market buy-out specialist Castle Harlan and its Australian affiliate CHAMP have raised their second buy-out pool of funds CHAMP II with aggregate commitments of A$950m. Demand for the fund was significantly more than the amount raised, Castle Harlan said in a statement. The original target was AUS$750m.
CHAMP II secured commitments from more than 40 institutional investors. Approximately one third of the fund comes from Australia, one third from North America and one third from Europe, Asia and the Middle East. Investors include limited partners from CHAMP I and Castle Harlan Partners IV.
Castle Harlan chairman John K Castle and Castle Harlan president Leonard M Harlan, said, ‘We have successfully met our objective of diversifying our strong existing investor base with additional top-quality investors worldwide. The interest from institutional investors from the US, Europe and Asia is a strong endorsement of the development of the private equity industry in Australia and its continued prospects.’
CHAMP Private Equity executive chairman Bill Ferris and CHAMP Private Equity managing director Joseph Skrzynski noted that CHAMP is ‘not under pressure to deploy capital immediately. We will invest over a five-year time horizon, focusing on growing our portfolio companies’ earnings, as the most important driver of value. This approach has served us well over the past 18 years, generating annual compounded returns of approximately 30 per cent.’
Ben Sebel, a Castle Harlan managing director, added, ‘CHAMP II will continue the successful strategy executed in CHAMP I, taking control positions in companies with an enterprise value greater than A$100m. This complements the activities of a related fund, CHAMP Ventures V, which focuses on expansion capital and management buy-outs of Australasian companies of less than AUS$100m in enterprise value.’
CHAMP, based in Sydney, focuses on buy-out investments in the Australasian market. CHAMP I funds were raised in 2000 and totalled AUS$500m.
Castle Harlan was founded in 1987. It formalised an association with AMIL in 2000 to create CHAMP Private Equity. Castle Harlan’s fourth fund closed in September 2003 with commitments of US$1.163bn and is currently 33 per cent invested, according to the firm.
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