Quadrant Private Equity No. 2

Quadrant Private Equity No. 2 is managed by QPE Funds Management Pty Limited a member of Sydney based Quadrant Private Equity (formally Quadrant Capital).

Quadrant Capital (www.quadrantcapital.com.au) launched their first fund in 1996 and subsequently grew funds under management to $250 million, across three funds, each focused on expansion and buyout stage private equity investments. The three Quadrant Capital funds invested in 36 businesses across a broad spectrum of industries with 28 of those investments now realised.

As at 31 December 2006, the Internal Rate of Return (or gross investment return per annum) for Quadrant Capital Funds 1, 2 and 3 was 24.5%, 44.8% and 89.6% respectively.

In 2005 the Quadrant Capital team formed Quadrant Private Equity (QPE) (www.quadrantpe.com.au) as an independent private equity fund manager owned entirely by its management team. QPE subsequently raised Quadrant Private Equity No. 1 with $265 million of commitments, which is now fully invested.

Quadrant Private Equity No. 2, with total commitments of $500 million, is focussed on investing into mid-market buyout and expansion capital opportunities in profitable, predominately Australian, businesses with enterprise value of between $50 million and $500 million.

Quadrant Private Equity No. 2 has to date completed investments in Quick Service Restaurants, Independent Pub Group, Virtus Health, Summerset Retirement Villages and iSentia.

Quick Service Restaurants (QSR). With the backing of Quadrant Private Equity No.2, QSR was formed in early 2007 when it acquired leading retail brands Red Rooster and Chicken Treat. The two roast chicken retailers, founded respectively in 1972 and 1976, had 450 stores (385 Red Rooster and 65 Chicken Treat) and a combined annual turnover of approximately $500m.

In July 2007, QSR acquired the Oporto Portuguese Chicken and Burger Chain for $60 million. The acquisition of Oporto increased the store distribution of QSR to 540 outlets, comprising more than 300 company stores and 240 franchise outlets across the Red Rooster, Chicken Treat and Oporto network in Australia and New Zealand.

Following the Oporto acquisition the expanded group served approximately 60 million customers visits per annum and employed more than 14,000 staff throughout its company and franchise network.

In June 2011 QSR was sold by Quadrant and management to a private equity fund managed by Archer Capital, for a reported enterprise value of approximately A$450 million.

Quadrant told Reuters the sale represented a threefold return to investors on its A$110 million equity investment.

Across four years of ownership, Quadrant had grown QSR from 450 to 620 stores and shifted the ownership mix of stores from 78% Corporate owned in 2007 to 72% under franchised operation as at June 2011.

Independent Pub Group

In December 2007 Quadrant Private Equity No. 2 invested in Independent Pub Group Pty Limited (IPG). At the same time, IPG purchased and settled one hotel, Christie’s Beach Hotel in South Australia and subsequently purchased an additional eight hotels including the Willow Hotel in Brisbane, another four hotels in Queensland and three in South Australia.

In June 2008 a further twelve hotels were contracted to be acquired by IPG, from the Singapore listed Lasseters International Holdings. Upon the completion of these acquisitions IPG will have twenty one hotels in total with twelve in South Australia, six in Queensland and three in New South Wales.

Quadrant have invested in IPG alongside a former senior executive of Club Hotels, which was a successful investment of a previous fund of Quadrant Private Equity’s, Quadrant Capital Fund No.3.

Virtus Health

In April 2008 Quadrant Private Equity No. 2 invested in IVF Australia the largest group of dedicated fertility specialists in NSW operating across an extensive network of fertility centres and consulting sites for the communities of Sydney and the Central Coast.

With a staff of more than 100, including a team of experienced scientists, nurses and counsellors, IVF Australia provides fertility treatment to men and women trying to conceive via treatment options including ovulation induction, insemination, IVF and ICSI.

In November 2008 IVF Australia acquired Melbourne IVF adding significant scale and market share to the overall group which was subsequently renamed IVF Holdings.

Melbourne IVF is a leading provider of IVF and related infertility treatment in Victoria and is known for being at the forefront of IVF technology around the world.

In 2009 IVF Holdings expanded into the Queensland market with the acquisition of the Queensland Fertility Group.

The combined group, which was subsequently renamed Virtus Health, now accounts for more than 40% share of the market for IVF services in Australia, which positions the new group as national leaders in assisted reproductive technology.

On the 11th of June 2013, Virtus Health Ltd became the first in-vitro fertilisation company in the world to publicly list its shares, listing on the Australian Stock exchange at a 7 percent premium to its offer price.

Virtus shares began trading at A$6.01 on their first day of listing, well above the A$5.68 offer price set for the float, giving the company a market value of around A$485 million.

The company posted a net profit of A$24.7 million in 2012 and is forecasting profit of A$26.6 million in 2013 and A$31.4 million in 2014.

Quadrant sold 100% of its investment in Virtus into the float, due to strong investor demand for the company’s shares, delivering Quadrant investors, including VPEG, a strong return on capital invested into the company.

Summerset Retirement Villages

In April 2009, Quadrant Private Equity No. 2 acquired a 50% equity interest in Summerset Retirement Villages (www.summerset.co.nz) from AMP Capital Investors (NZ). In April 2010 Quadrant acquired the remaining 45% of Summerset from AMP who in turn totally exited their holding in the company.

Summerset is one of New Zealand’s leading operators of retirement villages and providers of aged care services. Comprising ten operating villages and two villages under development, Quadrant’s investment in Summerset provides exposure to one of New Zealand’s leading retirement village operators and an industry experiencing rapid growth.

Summerset was founded in 1994 to provide mature New Zealanders with a high quality lifestyle in a safe, secure and enjoyable environment at an affordable cost. Summerset currently provides village lifestyle options and care facilities to more than 1450 people serviced by a staff of more than 360.

On the 1st of November 2011, Quadrant completed a successful Initial Public Offering of Summerset Retirement Villages. Summerset was the largest IPO on the New Zealand Stock Exchange in the past four years and delivered strong returns to Quadrant investors despite challenging market conditions.

Quadrant initially retained a 55% holding in Summerset at IPO with the remaining shares sold down over time until the stake was completely exited during October 2013. The exit delivered a strong return to QPE2 investors including VPEG.


On the 1st of July 2010, Quadrant Private Equity No. 2 acquired, by way of a management buyout, the international media services business, Media Monitors.

Established in 1982 Media Monitors is a market leading international media services business in Australia, New Zealand, China, Hong Kong, Malaysia and Singapore.

Media Monitors services over 5,000 corporate and government customers with a suite of products to monitor their customer’s interests in all media streams including press, broadcast and internet.

With 24/7 operations, Media Monitors’ more than 850 employees from across the region monitor and analyse thousands of information sources, including newspapers and magazines, media conferences, radio and television, news websites and social media sites to provide its clients with relevant and timely media insights.

During 2011, Media Monitors relaunched as Sentia Media reflecting its evolution from an Australian media monitoring business to Asia Pacific’s leading media intelligence group.

In December 2011 Sentia completed the acquisition of MediaBanc, the market leading media intelligence provider in South East Asia, and China Clipping, a leading media monitoring provider in China. Together with the acquisition of Singapore based Brandtology, a social media monitoring provider, earlier in 2011, Sentia has an established platform in Asia which broadens the group’s service offering and provides strong synergies.

In May 2014 iSentia concluded the book build for an Initial Public Offering (IPO) and raised $283.5m through the sale of 139m shares at $2.04 each. The sale price reflected 15 times 2015 forecast net profit of $27m giving iSentia a market capitalisation of $408m.

iSentia shares debuted strongly on the ASX on the 5th of June 2014 and were up 17% by the end of the first day.

QPE2, retained 50 million shares after the IPO, representing an approximate 25%post IPO holding. The post IPO shares will be escrowed until September 2015 when the 2015 results are released.

The iSentia exit, delivered a strong, top quartile, return to QPE2 investors including VPEG.