Investment in Five V Capital

Pinnacle Investment Management Group Limited (PNI or Pinnacle) is pleased to announce that it has agreed to subscribe for convertible redeemable preference shares that would give Pinnacle a 25% equity stake in leading Australian based private equity firm Five V Capital (Five V) (Preference Shares) (Investment), with an investment of $65m plus an additional $10m contingent on a successful second fund raising for Five V’s Venture Capital strategy.

Five V focuses on high growth assets in the attractive small to mid-market and currently has A$1.1bn FUM following the successful completion of the fund raising process in respect of Fund IV. 

Five V is led by principals Adrian MacKenzie and Srdjan Dangubic, supported by a team of investment professionals. The Five V team have consistently delivered strong returns with money multiples of 10.3x and 4.4x across Fund I and Fund II respectively. 

Five V specialises in high growth, technology enabled companies and has made 15 private equity and 17 venture capital investments to date, including in businesses such as Education Perfect, Probe Group and Universal Store. 

Pinnacle’s investment will be used by Five V to support co-investments, business development and growth initiatives, providing an important source of capital and profitability, with no sell down by existing Five V principals. 

Following the investment, Pinnacle will have exposure to Five V’s Fund III, Fund IV (closed in November 2021) and VC Fund 1, totalling FUM of $1.1 billion, and future funds raised by Five V. Pinnacle will provide enhanced distribution capabilities and assist Five V with distribution and fund raising. 

The Investment is consistent with Pinnacle’s strategy of increasing exposure to private capital markets, including private equity. It is expected to deliver attractive returns for Pinnacle shareholders and further demonstrates the flexibility of PNI’s model and ability to partner with fund managers across all asset classes. 

The conversion of the Preference Shares is subject to a number of conditions associated with retention and fund raising. The Investment remains subject to various conditions precedent and is expected to close prior to the end of November 2021. 

PNI Managing Director Ian Macoun commented: 

“We are very pleased to have the opportunity to partner with the Five V Capital team led by Adrian and Srdjan. Five V Capital have a proven investment strategy that has delivered exceptional returns and a track record of successful fund raising. 

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. 

The investment made today ensures a strong degree of alignment between Pinnacle, the existing Five V principals and the broader investment management team. Our investment will provide a source of capital for Five V to use for co-investments, growth and business development initiatives. Over time, investment professionals within the Five V group will also have the opportunity to buy a portion of the equity currently held by Adrian and Srdjan, enhancing internal alignment and promoting longevity and consistency of performance.” 

Five V founder Adrian MacKenzie commented: 

“We are delighted to be partnering with Pinnacle for the next stage of our journey. Culture and a shared philosophy are critical to any partnership and we feel that Pinnacle are a natural fit. We are flattered that we have been invited to sit alongside Pinnacle’s other managers given their excellent track record and best of breed reputation. 

The primary capital investment in Five V will enable us to now invest our balance sheet alongside the significant team investment in our funds. This creates even greater alignment with our investors and with our management teams, founders and partners. We see significant opportunities to invest and grow in our part of the market and this capital will allow us to further execute our strategy and make great investments. We also look forward to working together with the Pinnacle team on distribution and fund raisings in the future.”