Pinnacle joins white-hot private equity market

Investment manager Pinnacle Investment Management (ASX:PNI), which runs a multi-affiliate firm, has bought into private equity investor Five V Capital, buying a 25 per cent stake for $75 million. The relatively new but well-known private equity manager has roughly $1.1 billion in funds under management and invests in market-leading, innovative businesses in industries with strong […]

Investment manager Pinnacle Investment Management (ASX:PNI), which runs a multi-affiliate firm, has bought into private equity investor Five V Capital, buying a 25 per cent stake for $75 million. The relatively new but well-known private equity manager has roughly $1.1 billion in funds under management and invests in market-leading, innovative businesses in industries with strong tail-winds.

The Australian-based Five V Capital specialises in private equity and venture capital ,which has given it unique experience from both well-established businesses primed for growth, and start-ups working on the newest ideas. Its portfolio includes some well-known names such as Zenith Investment Partners, Plenti (ASX: PLT), Madman Entertainment, as well as one of Australia’s largest unicorns, the graphic design platform Canva, cybersecurity company Penten and share registry technology company Automic. It owned casual fashion outlet Universal Store (ASX:UNI) but exited earlier this year.

Pinnacle will add Five V Capital to its portfolio of fund managers, such as Spheria Asset Management, Firetrail Investments and Hyperion Asset Management. The deal is an intriguing addition to Pinnacle’s suite of funds.

Five V Capital was founded by Adrian MacKenzie and Srdjan Dangubic, and invests in small, high-growth Australian businesses. Early on the team nailed Canva, which was a huge win. The new IV fund has raised $550 million. All up, the firm looks after about $1.1 billion in funds under management. 

According to the AFR, Pinnacle will pay as much as $65 million plus an additional $10 million contingent on a successful second fund raising for a 25 per cent stake, and will tap shareholders for $105 million throug an equity raising at $16.70 a share. This represents a 4.6% discount to the last close on 22 November, of $17.50, and a 7.6% discount to the five-day volume-weighted average price (VWAP) to 22 November 2021, which was $18.08 a share.