Mid-market private equity firm Next Capital has locked in $375 million for its latest fund, which saw domestic investors account for more than half of commitments and a final close ruled off last week.
Sources said the fund-raising – led by founding partners John White and Patrick Elliott, who together with Sandy Lockhart spun Next out from Macquarie Bank in 2005 – punched through the initial $350 million target and attracted half a dozen new investors.
It is understood ASX-listed Alloggio Group, a short-term rental operator which Next is seeking to acquire via a scheme of arrangement and has just commenced the court process for, will be the new fund’s second investment. (Next did a rapid-fire first close earlier in the year to fund a majority stake in rehabilitation retailer Country Care.)
When contacted by Street Talk on Monday, White declined to comment on details of the fund. “It’s good to see local institutions and high-net worth investors returning to Australian lower middle-market funds,” he said.
Importantly, Next Capital’s existing investors, which include Michael Lukin’s Roc Partners, industry super giant CBUS and MLC Wealth, have been attracted to Fund V because they are familiar with, and keen to invest with, the same deal makers that have had success with earlier funds. Next’s last fund made more than 30 per cent returns on an IRR basis.
The Sydney-based buyout firm earlier this year elevated investment director Bing Jiang to partner status, rounding out the partner roster to five. Jiang helped oversee investments in baggage handler Aerocare, health supplements business Vitaco, and mini golfing company Funlab.
In 2014, James Murphy was promoted to partner, while Next also counts David Browne among its investments team. Co-founder Sandy Lockhart has since retired. However, he remains on the investment committee.
Limited partner sources pointed to director Adam Dicembre as a deal maker to watch. Dicembre most recently drove the buyout shop’s investment in budget campervan and car hire group Jucy Rentals, alongside Elliott.
Jucy Rentals found a home in Next Capital’s fund IV, which also owned stakes in equipment rental business Silverchef, contractor Eptech Group and remediation company Enviropacific Services. Recent divestments include urban bus line business NZ Bus, which was sold to Australia’s largest bus network Kinetic in early 2022, and the sale of bowling alleys and mini golf company Funlab to TPG in 2020.
