In a recent fireside chat, Jeremy Samuel, the founder and managing director of Anacacia Capital, discussed the landscape of mid-market private equity in Australia and the opportunities that exist. The conversation was hosted by Giovanni Amodeo, and the key topics discussed are as follows:

1. Anacacia Capital’s Focus: Anacacia Capital, founded in 2007, focuses on investing in established, profitable small to medium-sized companies, typically with revenues between $20 million and $500 million. These businesses are often family-owned and dealing with succession planning.

2. Australian Private Equity Landscape: Over the past 20 years, the landscape of private equity firms in Australia has changed significantly, moving from bank ownership to employee ownership. The market has also become more segmented, with a large number of global players operating in the large buyout market, and a growth in early-stage venture firms. However, there are fewer firms operating in the mid-market, where Anacacia Capital focuses.

3. Anacacia Capital’s Investment Strategy: Anacacia Capital’s approach to investment involves gaining exclusivity before investing any money on due diligence. This allows the firm to get to know the businesses well and ensure that they are investing in well-managed, profitable businesses.

4. Fundraising and Capital Structure: Anacacia Capital’s last fund was a $300 million lower mid-market buyout fund. Currently, they are raising their fourth fund, with a hard cap of $450 million. Samuel emphasized the importance of regularly reviewing the capital structure of portfolio companies and maintaining a conservative approach, especially in the current economic climate.

5. Relationship with Portfolio Companies: Anacacia Capital adopts a supportive role with its portfolio companies, providing strategic guidance and facilitating peer-to-peer learning sessions. They also host CEO fireside chats, where CEOs discuss common issues and share ideas.

6. Future Plans: Despite the growth in private credit market in Australia, Anacacia Capital has no plans to venture into private debt, maintaining their focus on equity market. They also have no plans to significantly increase the size of their fund, preferring to remain focused on the lower mid-market.