Ex-Pinnacle chiefs hunt for fast-growing fundies
A new private equity firm backed by former Pinnacle executives is raising up to $200 million to buy up minority stakes in asset managers it hopes will emulate the lucrative returns of the founders’ previous employee.
Scarcity Partners, which has adopted this so-called GP-staking model, said it was close to making its first investment as it introduced a $76 billion private equity sub-sector to the Australian market.
Scarcity Partners Managing director Adrian Whittingham. Louie Douvis
Managing director Adrian Whittingham told The Australian Financial Review the firm had met with more than 80 fund managers since it opened in March and was getting close to allocating money.
“If you get it right, the returns can be exceptional. It’s all about bringing operating leverage to investors,” he said.
The Scarcity GP Access Fund is targeting 20 per cent per annum returns by backing firms in both traditional asset classes such as equities and alternative asset management, such as private equity, credit and real estate.
Mr Whittingham was the former head of distribution at Pinnacle Investment Management and was involved in making several high-profile investments in asset managerssuch as Firetrail.
He is among seven founding partners, including Alex Ihlenfeldt, another former Pinnacle executive, Hyperion co-founder Tim Samway, former Paradice Investment Management chief financial officer Tony Hammond, Magellan veteran Matthew Webb, and former Clearview chief investment officer Justin McLaughlin.
The GP staking model involves creating a fund structure that takes minority stakes in asset managers while allowing the founders to retain control. The funds are evergreen, meaning there is no defined period for it to realise gains through
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