MLC Private Equity, a division of MLC Asset Management Pty Limited, one of Australia’s largest investment managers^[1], has announced a significant investment into its private equity capability with the creation of a new private equity investment vehicle which will also provide access to additional future private equity investment opportunities for global institutional investors.

MLC PE Partners is comprised of approximately US$632 million^[2] of PE assets across a diversified portfolio of global middle-market PE fund positions and co-investments. The portfolio is diversified across several industries such as IT, healthcare, technology, and consumer-focused sectors, across North America, Europe, and the UK. In addition, the Fund raised US$130 million of new capital to be invested by MLC Private Equity’s experienced investment team into new global middle-market PE fund and co-investments with a focus on North America, Europe, and the UK.

The managed secondary transaction was anchored by funds managed by StepStone, which served as the lead investor. StepStone is a global private markets investment firm, with responsibility for approximately US$659 billion of total capital, including US$149 billion of assets under management.

Campbell Lutyens acted as sole financial advisor for the transaction and Ropes & Gray is the legal adviser to the Fund. Debevoise & Plimpton LLP provided legal counsel to StepStone.

Marek Herchel, Co-Head MLC Private Equity (US and Europe) said: “The strategic nature of MLC PE Partners along with MLC Private Equity’s market leading private equity capability attracted a select group of prominent global institutional investors alongside StepStone Group. We look forward to long lasting partnerships with these investors. This transaction speaks to our ability to offer access to differentiated investment opportunities within our global private equity capability, leveraging our highly skilled investment teams in Sydney and New York.”

Kristian Zimmermann

Kristian Zimmermann, Co-Head MLC Private Equity (Australia), noted: “We are pleased to be the first in Australia to establish this innovative investment structure to provide access to a high-quality private equity portfolio and a strong pipeline of investment opportunities to institutional third-party investors. Private equity remains an attractive asset class for investors looking to achieve consistent returns.

“As a provider of liquidity solutions in collaboration with asset owners, we are excited to partner with MLC on this landmark transaction that supports their go-forward activities and also provides StepStone exposure to an attractive portfolio of MLC’s private equity assets,” said Adam Johnston, Partner, StepStone. “MLC has built an impressive private equity program, including relationships with some of the top managers in the North American and European middle-market. We appreciated the opportunity to partner in the development of this fund, including constructing a high-quality and diversified portfolio.”

MLC Private Equity is one of the most experienced global private equity managers in Australia with over 25 years’ experience investing in private equity. Since inception, MLC Private Equity has committed approximately A$10 billion to private equity funds and co-investments across 100+ fund relationships globally. MLC Private Equity’s investment team is comprised of 10 dedicated investment professionals located in Sydney and New York.

The team has deep relationships with specialist private equity managers globally. MLC Private Equity manages capital on behalf of institutional investors, family offices and individual investors in Australia and internationally.

MLC Asset Management US LLC, located in New York, is the investment adviser to MLC PE Partners and an affiliate of MLC Asset Management Pty Limited.

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Kristian Zimmermann

MLC Asset Management has launched its first retail private equity fund, the MLC Global Private Equity Fund (the ‘Fund’), providing retail investors with concentrated exposure to global private equity investments previously only available to institutional investors.

MLC Asset Management is one of Australia’s largest investment managers with over $149 billion in assets under management^[1]. Designed by the MLC Private Equity team to meet the growing demand from retail investors for this asset class, the Fund offers retail investors a diversified portfolio including carefully selected private equity opportunities, with a minimum investment of $20,000.

Kristian Zimmermann, Co-Head Private Equity (Australia) at MLC Asset Management, said: “We have been investing in the private equity asset class on behalf of institutional investors for 25 years and we’re very pleased to now offer the retail market rare access to private equity investments. Our new Global Private Equity Fund aims to provide long-term capital growth, by investing in a diverse range of global equity assets, for retail investors.

“Through close relationships developed with specialist private equity managers, we aim to secure access to global and diversified private equity investment opportunities. The Fund is designed for investors with a higher risk-return appetite who want to diversify their portfolio by investing into private equity and are comfortable with limited liquidity.

“Private equity provides additional portfolio diversification as it allows investors to gain a different return and risk profile relative to traditional asset classes over the long term. Against the current macroeconomic backdrop and rising inflationary pressures, we continue to witness the resilience of private equity as an asset class and the creation of new opportunities for retail investors. This goes without saying investors need to be aware of the risks when investing in private equity, which, amongst other things include limited liquidity and the risk of a loss of capital,” said Mr Zimmermann.

MLC Private Equity, a division of MLC Asset Management Pty Limited, is one of the most experienced global private equity managers in Australia with over 25 years’ experience investing in private equity. The team, which currently manages $4 billion in funds^[2], has delivered financial returns to investors over the life of the program, through differing market cycles.

The Fund is a mature portfolio of assets, providing exposure across geographic regions, strategies, and industry sectors, including healthcare, technology, and consumer focused industries. With investments in private equity funds and co-investments, the portfolio also includes a listed private equity-related exchange traded fund (ETF) and cash to assist in managing liquidity.

Mr Zimmermann said: “The Fund is diversified across several private equity strategies, including growth and buy-out strategies, enriching the potential for significant returns through opportunities to improve businesses’ performance and valuation.

“We’ve developed deep relationships with specialist private equity managers globally, giving us access to investment opportunities that provide exposure to the returns of private companies with the potential for strong and sustained transformation and growth.”

“Our global team takes a research-driven approach to discovering, selecting and investing in private equity opportunities with high potential for delivering returns to our investors, while focusing on managing risks,” Mr Zimmermann concluded.

The MLC Global Private Equity Fund is available via its Product Disclosure Statement (PDS) and will become available on investment platforms in the future.

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[1] As at 30 June 2022.
[2] Insignia Financial Ltd FY22 ASX Results Presentation, 25 August 2022.

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The new team members are:

• Ms Laura Hotaling who has been appointed Portfolio Manager. She brings 13 years of investment management experience and will be responsible for researching, originating, and executing fund and co-investments in the US and Europe. She joins MLC from New York State Teachers’ Retirement System (NYSTRS), one of the largest public pension funds in the US. Most recently she served as the pension’s Chief Risk Officer, following eight years as a portfolio manager responsible for NYSTRS’ international private equity investments.  She commences with MLC on 7 September.
• Ms Alicia Chen joins MLC as a Senior Associate. With a strong background in direct private equity investments and manager assessment, Ms Chen will support the origination and execution of fund and co-investments in the US and Europe. Most recently Ms Chen was a private equity associate at AMERRA Capital Management and previously worked at UAW Medical Benefit Trust. Ms Chen started her role on 31 August.
• Ms Ashini Ganesalingam has been appointed Senior Associate. With a background in manager due diligence, she will support the origination and execution of fund and co-investments in US and Europe. She joins from Aksia, where she conducted due diligence across private equity, private credit and hedge fund commitments. Ms Ganesalingam joined the team on 31 August.

Commenting on these appointments, Mr Kristian Zimmermann, Sydney-based, MLC Co-Head of Private Equity, said: “We are delighted to have high-calibre investment professionals like Laura, Alicia and Ashini join our growing team. They bring a range of high-quality private equity experience, that will enhance our diversity of thought and strengthen our global coverage, investment sourcing and execution capabilities.”

With these appointments the team now has ten investment professionals who are based across the New York and Sydney offices, offering a well-balanced structure to continue to deliver for MLC’s investors.

New York-based Co-Head of Private Equity, Mr Marek Herchel said: “It is really exciting to welcome three such highly qualified investment professionals to our New York team. Laura, Alicia and Ashini bring highly complementary backgrounds and skills and will further strengthen our positioning as a preferred partner to our key general partner relationships.”

Mr Herchel continues to drive the investment agenda globally, while Mr Zimmermann focuses on growing the Australian business and delivering MLC’s Private Equity capability to a broader range of clients.

The latest appointments build on several senior appointments announced earlier this year, Mr Kristian Zimmermann as the Co-Head of Private Equity and Ms Rachael Lockyer as Portfolio Manager within the MLC Private Equity team.

MLC Private Equity manages over A$5 billion in assets under management.

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Rachael Lockyer

MLC Asset Management has announced the appointment of Kristian Zimmermann as the Co-Head of Private Equity, in a move that will further strengthen MLC’s Private Equity offering.

Mr Zimmermann brings over 20 years of global experience and joins from Temasek in Singapore, where he was a senior director and Head of the Investment Review team. He has previously held senior roles at Commonwealth Bank of Australia, Macquarie Bank, Deutsche Bank and Merrill Lynch.

In his new role at MLC that will commence in mid-June, Mr Zimmermann will work alongside New York-based Co-Head Marek Herchel.

Commenting on the appointment Mr Herchel said: “Kristian brings extensive experience and a complementary skillset to the role, which will further support the development and growth of MLC Private Equity.”

Mr Herchel will continue to drive the investment agenda globally, while Mr Zimmermann will focus on growing the Australian business and on delivering MLC’s PE capability to a broader range of clients.

MLC CIO, Jonathan Armitage, said Mr Zimmermann’s appointment added further depth and expertise to MLC’s existing Private Equity team.

“Kristian’s impressive, wide-ranging international expertise together with his experience in leading a team that looked at a wide range of unlisted assets such as private equity, direct property and infrastructure, as well as listed equity and fund investments means he is a great fit for this role. With Kristian onboard and working alongside Marek Herchel we look forward to seeing continued growth of the MLC PE business,” Mr Armitage said.

Mr Zimmermann’s appointment follows Rachael Lockyer, who joined earlier this year as Portfolio Manager within the MLC Private Equity team. Ms Lockyer brings over 14 years’ experience and strong PE expertise, having previously worked at L Catterton and Ironbridge Capital.

“Rachael brings deep, hands-on private equity investment experience to the role and has hit the ground running since joining in late March,” Mr Armitage said.

Strong track record and exciting trajectory

Launched in November 2019, MLC Private Equity Co-investment Fund III has recently completed its second close with $147m in committed capital to date. From this capital, the team have made the Fund’s initial three investments.

“We are pleased with the strong level of interest in Fund III. Strong exits from Fund I and early successes in Fund II have demonstrated the team’s industry-leading expertise,” Mr Armitage said.

Fund II (launched in 2017) has exited the first 2 of its 21 investments. The first was a European business services company which generated a 3.3x return. The Fund recently also exited its investment from an American data analytics company, which returned 2.9x capital to investors.

Fund I (launched in 2013) has exited nine of its 14 investments and has to date delivered investors an IRR net of all fees of 20.6% since inception (target of 15%) and achieved a gross multiple on invested capital of 3.0x to the same date. This performance ranks the Fund among the top quartile of buyout-focused PE funds surveyed by Cambridge Associates from the 2013 vintage globally.

“As one of the most established global PE programs, and with an outstanding track record of performance spanning over 20 years, we are well positioned to execute on our strong growth agenda,” Mr Armitage said.

MLC Private Equity manages in excess of $5b in FUM.

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