Pinnacle Investment Management has received a 25% equity stake in Australian-based private equity, Five V Capital.
The acquisition was via convertible redeemable preference shares, with an investment of $65 million plus an additional $10 million which was contingent on a successful fund raising for the Five V’s venture capital strategy.
In an announcement made to the Australian Securities Exchange (ASX), the company said it was a strategic investment that was expected to deliver attractive returns for Pinnacle shareholders and was consistent with the firm’s strategy of increasing exposure to private capital markets.
Pinnacle’s investment would also provide Five V with capital to support co-investments and business development initiatives while, over time, members of the broader investment management team would be invited to acquire equity in Five V from the principals, with no sell down by existing Five V principals.
Five V, which was currently led by Adrian MacKenzie and Srdjan Dangubic, focussed on high growth assets in the attractive small to mid-market and currently had $1.1 billion in funds under management (FUM).
Pinnacle managing director, Ian Macoun, said: “The investment announced today is consistent with Pinnacle’s strategy of diversifying into higher growth alternative asset classes such as private equity, and demonstrates the attractiveness of Pinnacle as a trusted partner to fund managers across all asset classes”.
Pinnacle also announced it launched a $105 million fully underwritten institutional placement to fund the investment and replenish balance sheet capacity that was used to fund the acquisition of the 25% stake in Coolabah in 2019.