Pacific Equity Partners

Pacific Equity Partners (PEP) is a private equity investment firm focusing on transactions in Australia and New Zealand. PEP invests across a range of industries and sectors, in turnaround and growth capital transactions. By 2023, The Australian Financial Review reported PEP to be Australia's largest private equity firm.

It is also said to be Australia's oldest private equity company. The firm, based in Sydney, was founded in 1998 by Rickard Gardell, Paul McCullagh, Simon Pillar and Tim Sims. All but McCullagh previously worked together as executives at Bain & Company.

PEP has generated several buyout funds for investors. By 2022, these funds had $8.6 billion under management. The launch of a continuation fund that year lifted this figure to $10 billion.

In 2023, the firm announced its first "Gateway fund" which it described as a mechanism by which private investors may access global private equity investing, with reduced initial investment requirements. In this approach, capital is distributed into PEP funds alongside funds from high-end global private equity firms such as Bain Capital and Leonard Green & Partners.

PEP opened its seventh buyout fund, called Fund VII, in 2024, expecting to close later that year at A$3 billion. This would be one of the largest Australian funds of its kind.

Investments
Since its establishment in 1998, the firm is understood to have completed 40 private equity buyouts by 2023. Apart from buying and operating large companies, PEP has made 100 "bolt-on" acquisitions in the same 25-period, these are smaller firms, bought and merged with portfolio companies, for their strategic value. Some of the firm's recent investments have included Patties Foods, iNova Pharmaceuticals, the medical devices group LifeHealthcare, the smart metering company IntelliHUB, and Evolution Healthcare.

PEP claims to have "at least doubled" investor monies in 12 of its previous 13 deals, which have included the purchase, restructure and resale of several Australian and New Zealand companies such as Spotless, Hoyts and Frucor. The one business in this set that did not double its value was Patties, being resold at a multiple of 1.7, due to low post-Covid earnings for that food group.

Investment products
PEP invites investors to access the value their corporate acquisitions generate. This is through five product sets, described as "investment strategies."


 * 1) Private Equity—traditional flagship buyout fund. Its most recent buyout being the allied health company Healthia in December 2023. As of 2024, there have been seven funds in this strategy, of which Fund I, II, III, IV, V have been completed, Fund VI is fully invested, and Fund VII is open.
 * 2) Secure Assets—spun out of private equity fund, focusing on infrastructure-like companies with protected cashflows. Two funds have been established in the strategy, SAF I and SAF II. One of the investors in the latter is the Clean Energy Finance Corporation.
 * 3) Capital Solutions—a private debt strategy, sold with management input, plus senior secured loans. The funds in this strategy offer a portfolio of loans offered to mid sized businesses in Australia and New Zealand.
 * 4) Single Assets—single assets from co-mingled fund, put into its own continuation vehicle. Target investments in these group have included Intellihub.
 * 5) PEP Gateway—a portfolio of premium global private equity funds with a lower initial investment requirement. Here, private investors may access a "fund of funds", exposing them to larger private equity outfits such as Bain Capital, Brookfield Corporation and Carlyle Group.

PEP Gateway is the firm's most recent investment strategy, launched publicly in 2022.

Target investments as of 2024
The following schedule indicates the businesses PEP has targeted and acquired and which they continue to own and manage, current to February 2024.

Past investments
In its early years, the firm's investments were dominated by companies in Australia and New Zealand's food and beverages sector. These target businesses included Allied Pinnacle (sold to Nissin Foods in 2019), Frucor (sold to Suntory in 2008), Peters Ice Cream (sold to Froneri in 2014), Tegel Foods (acquired in 2005 from Heinz and sold to Affinity Equity Partners in 2011), Independent Liquor (sold to Asahi Breweries in 2011), and Griffin's Foods (acquired from Danone in 2006 and Universal Robina in 2014 and then sold to Intersnack in 2021), Education and health care, which would later become an investment themes, began with the purchase of the ACG business and Manuka Health, both from New Zealand. Many investments have followed the company's stated goal to purchase businesses of up to $1 billion, lifting financial performance in a five year period, then selling at a multiple.

History and culture
Pacific Equity Partners was founded in Sydney, Australia, in 1998. The founders came from the consulting and banking sectors: Rickard Gardell, Tim Sims, Simon Pillar all from Bain & Company; and Paul McCullagh, from Salomon Brothers. While McCullagh stepped back from management operations in 2017, as of 2023 all four had remained in the partnership.

Some industry commentators have described PEP as having an 'apprenticeship' culture, with long-standing founders and senior staff deliberately hiring junior employees, as it enables cultural formation within the firm over a long tenure. Staff longevity and team-based approaches to deals, likened to a management consulting ethos, may have helped make the firm distinctive in its market.

The company's headquarters are in Deutsche Bank Place, Sydney, the first building in the Southern Hemisphere designed by Sir Norman Foster.