This will invest in targeted deal flows in selected sectors of health, digitalisation and technology, energy transition, and food and beverage across lower mid-market companies, classed as those with an enterprise value of less than $200 million.
This sector, which consists of over 68,000 domestic companies, offers a broad range of opportunities, relatively limited competition for transactions, comparatively lower entry prices, and a variety of options for exit, Fortitude said.
The Fortitude Small Cap PE Fund is the first co-mingled fund from the investment manager, which has previously only invested in single-company private equity deals.
It will offer quarterly applications and redemptions after a two-year establishment period. With no drawdown period, structuring the fund as evergreen provides investors with immediate access to a diversified portfolio and may have the ability to provide some liquidity in a traditionally illiquid asset class.
According to data from Hamilton Lane, 415 evergreen funds were launched between 2017 and 2023 globally, and they account for 5 per cent of broader private markets, representing $700 billion. In Hamilton Lane’s view, evergreen funds are poised to take up at least 20 per cent of total private markets in a decade’s time.
Nick Miller, partner and co-founder of Fortitude, said: “We are excited to offer this new fund to the market. The Fortitude Small Cap PE Fund is designed to provide investors with flexible, diversified, access to a range of opportunities in fast-growing, profitable companies in Australia and New Zealand.
“We have a rich heritage of identifying high-performing businesses, being exceptional growth partners and achieving profitable exits in this segment.”
Chief commercial officer Chris Brookman said: “Given its higher return potential and differentiated exposure, the Fortitude Small Cap PE fund may work well as satellite allocation alongside more diversified global funds in the private equity space. The lower mid-market private equity segment is chronically underserved by the private equity industry, and with few managers specialising in this segment we believe our offer is unique and highly differentiated.”
The fund has a minimum investment of $100,000 and is available for both direct investment and on HUB24 and Netwealth platforms.
