Next Capital II is managed by Sydney based Next Capital Management Pty Ltd.

Next Capital Management (www.nextcapital.com.au) was established in 2005 by Sandy Lockhart, Patrick Elliott and John White, who were former principals of Macquarie Bank’s private equity arm, Macquarie Direct Investment Limited (MDI).

MDI raised and invested four private equity funds with the founders of Next Capital delivering top quartile returns across the MDI investments in which they were involved.

Having completed 39 investments and 24 exits across more than 20 years of investing the executive team at Next Capital represent one of the most commercially experienced managers in the Australian market.

Examples of the executive team’s previous investments while at MDI include;

– JB Hi-Fi, acquired by MDI in July 2000 for $42 million and subsequently listed on the ASX in October 2003 at an enterprise value of $175 million delivering an internal rate of return (IRR) on the investment of 88% p.a. and 6.5 times equity capital invested.

– InvoCare, acquired by MDI in May 2001 and subsequently listed on the ASX in December 2003, raising $172 million, delivered an IRR of 48% p.a. and 2.8 times equity capital invested.

Next Capital II, with a total fund size of $285m, is focussed on investing into small to mid-market expansion and buyout opportunities of profitable, Australian & New Zealand businesses, with enterprise value of between $50 million and $250 million at investment.

Investments completed to date by Next Capital II include Onsite Rental Group, Discovery Holiday Parks, Aero-Care, Next Athleisure, Go Bus & Scottish Pacific Debtor Finance.

Onsite Rental Group. During December 2010, Next Capital II invested in Onsite Rental Group to fund its acquisition of Perth based equipment rental business Statewide Equipment Hire.

The Onsite Rental Group is one of Australia’s most experienced national equipment rental companies providing an extensive range of specialist rental products and services across multiple industries and geographies.

The company’s solutions include portable buildings and toilets, power generation, air and pumps, welders and lighting towers, access equipment, event solutions, scaffolding and temporary fencing.

Industries serviced include mining, infrastructure, commercial, Industrial and residential construction, events, logistics, government and public services. Major customers include BHP, Rio Tinto, Fortescue Metals, Thiess, Monadelphous, John Holland, Bilfinger Berger Services and Leighton Contractors.

Discovery Holiday Parks – During December 2010, Next Capital II purchased Discovery Holiday Parks from Allegro Private Equity.

Discovery Parks is Australia’s largest owner and operator of holiday park accommodation and a major provider of workforce and corporate accommodation, with a portfolio of 31 parks across all states of Australia.

The portfolio comprises in excess of 6,200 accommodation sites (rooms, cabins, and caravan / camping sites) with an additional 1,200 sites in various stages of planning approval.

Alliances exist with BIG4 and other Top Tourist and Family Parks to ensure maximum exposure to the Discovery Holiday Parks name as it continues to secure it’s position as market leader in the accommodation park industry.

The success enjoyed by Discovery Holiday Parks today has been established by developing systems and procedures that streamline the operations, whilst maximising the customer experience and delivery of the Discovery Holiday Parks brand values.

Discovery Parks’ strategy is focussed on continued portfolio improvement to deliver high levels of customer satisfaction. Since 2008, Discovery Parks has delivered compound EBITDA growth of 21.2% per annum, with total room nights increasing by approximately 54% across the same period

On 10 February  2014, Next Capital II completed the sale of Discovery Parks, excluding Discovery Parks Onslow, to Queensland-based industry fund, SunSuper.

SunSuper previously owned 30% of Discovery and offered to buy the remaining 70% of Discovery at an Enterprise Value of $240 million which represented an 8.5 X EBITDA

Next Capital II subsequently then regeared Onslow and distributed further proceeds to investors.

The Discovery exit, the first from the Next Capital II fund, delivered Next II investors including VPEG a >2.5x multiple of money and IRR of in excess of 38%, with further potential upside to flow from this residual interest in Onslow.

Aero-Care – On 8 September 2011, Next Capital II (Next II) completed the management buyout of Aero-Care Pty Ltd, Australia’s largest independent provider of outsourced airport services focused on ground handling.

Aero-Care is a well-run, established, high-margin business exposed to long term growth in outsourced services to the airport infrastructure market. Aero-Care  focuses on serving the growing Low Cost Carrier (LCC) segment of the aviation market.

Aero-Care is widely recognised as providing unmatched levels of service to its customers by providing them with a competitive and commercial advantage in terms of cost and performance. Aero-Care is now the most experienced outsourced Flight Support organisation in the Australian aviation industry.

It’s major customers are generally serviced under long term contracts and include Virgin Australia, Jetstar, Pacific Blue, Qantas, Emirates, DHL and SkyWest Airlines.

At investment, Aero-Care operated from 16 airport locations across Australia, with revenues well diversified servicing all major airports including, Perth, Adelaide, Hobart, Melbourne, Canberra, Sydney Domestic & International, Coolangatta, Townsville and Cairns.

During Next II’s ownership, Aero-Care grew significantly via acquisition and the winning of many new contracts servicing additional airports and airlines such that by June 2014, it employed over 1,500 staff and serviced major domestic and international airlines across 23 airports in Australia and New Zealand.

In June 2014, Next II sold Aero-Care to Archer Capital Fund 5 for a media reported enterprise value of approximately $200m.

The Aero-Care exit, delivered Next II investors including VPEG a 52% IRR on the base enterprise value, increasing to 54% IRR should the earn out amount be paid on achievement of agreed earnings in FY16.

Next Athleisure is comprised of Glue Store (a leading street wear retailer), Trend Imports (an apparel wholesaler) and Topshop (a majority interest in the company with the franchise rights to operate the Topshop business in Australia).

Glue is a youth-oriented retail apparel businesses operating 32 stores and a  rapidly growing web business. The stores are primarily located in metropolitan areas of NSW, ACT and VIC, retailing a portfolio of international and domestic third party brands, Glue-exclusive international brands and a number of owned domestic brands.

Trend Imports is an apparel wholesaling business which wholesales the Henleys, Le Coq Sportif, Cappellini and Gas menswear brands and the Nude Lucy, Lulu & Rose and Henleys womenswear brands.

Topshop (Top Australia) holds the licence to operate the Topshop and Topman brands in Australia. Topshop is a highly successful, youth-oriented high-street fashion brand which has successfully grown from a base in the United Kingdom to operate in excess of 400 owned and franchised stores around the world. The first Topshop store in Australia opened in Melbourne in early December 2011.

Go Bus. In May 2012, Next Capital II led the acquisition of the New Zealand bus company GoBus.

At the time of the acquisition GoBus provided urban, school and charter bus services to four of the six largest public transport markets in New Zealand (Hamilton, Napier, Tauranga, and Christchurch), with a strategy to expand into the remaining key markets (Auckland, Wellington).

During Next Capital’s ownership GoBus achieved an EBITDA CAGR of 38%, having successfully delivered growth initiatives including:

– Acquisition of two major South Island businesses to build out GoBus’ South Island presence;

– “Tuck-in” acquisitions of a number of smaller operators, leveraging existing operational infrastructure;

– Successfully tendering for Special Needs School contracts across New Zealand, including a key entry point into the Auckland market; and

– Like-for-like performance improvement driven by enhanced operational efficiency.

On 11 August 2014 Next Capital entered into a binding agreement with an Iwi Consortium for the sale of GoBus. The transaction completed on 30 September 2014, delivered a 36% IRR over a holding period of just over two years.

The top quartile return delivered by this investment was the result of the strong earnings growth within the business during Next II’s two year investment period, with EBITDA increasing from NZ$13.2 million to NZ$24.3 million.

Scottish Pacific Debtor Finance.  On the 1st of July 2013 Next Capital II, in a consortium with co-investors and management, purchased Scottish Pacific Debtor Finance for a (media) reported $100 million.

Established in 1988, Scottish Pacific Debtor Finance is Australia and New Zealand’s largest specialist provider of debtor finance services, specialising in invoice discounting and invoice factoring, specifically tailored for small and medium-sized enterprises. Scottish Pacific have offices in all main land state capitals of Australia and New Zealand.

Australia’s debtor finance industry turns over more than $62 billion each year and has had compound annual growth of over 20 per cent since 1996.

At the time of Next Capital’s investment, it was reported that Scottish Pacific handled more than $3.5bln in invoices annually and had projected fiscal 2013 earnings before interest and tax of about $15m, on annual sales of about $200m.