Queensland Investment Corporation (QIC) has entered a strategic partnership with Danish pension fund PenSam to provide exposure to European private equity investments.
According to the firm, an initial mandate of 2.2 billion Danish kroner (approximately $500 million) from PenSam will be invested over three years through both co-investments and fund commitments, with a focus on lower middle market buyouts alongside established and emerging sponsors.
QIC’s private equity partner and head of Europe, Rune Jepsen, said the partnership comes at an opportune time due to current cyclical and structural developments in the European private equity market.
“As a long-term investor in the lower mid-market, QIC has seen a shifting landscape where traditional peer investors have migrated out of this part of the market for various reasons,” Mr Jepsen said.
“This has had a particularly pronounced effect on capital availability for emerging mid-market private equity managers, where QIC remains active on the back of a strong track record supporting new sponsors through both fund commitments and co-investments.
“This structural shift in capital availability for lower mid-market buyouts has recently been coupled with a cyclical decline in capital availability for private equity in general.”
In this context, Mr Jepsen explained that both QIC and PenSam now see an opportunity in the current market.
QIC also confirmed that the mandate will target control investments in high-growth companies, typically with an enterprise value of between €100 million ($170 million) to €1 billion ($1.7 billion).
PenSam’s head of private capital and real assets, Jeppe Starup, added that the decision to partner with QIC was bound by the single objective of delivering investment outcomes for their clients.
“It is of great importance to us to work with someone who shares our philosophy and where we enter as equal partners in a close collaboration with a common goal,” Mr Starup said.
“This includes a strong focus on the consideration of ESG factors and long-term value creation.”
QIC chief executive Kylie Rampa explained that the partnership will have the dual effect of bolstering QIC’s capital base and allowing for an expansion of the local investment team in Europe.
“QIC has been represented locally in Europe since 2006 with teams in both Copenhagen and London working with and for our international clients to deliver positive outcomes,” Ms Rampa said.
“As we look to the future and the scope of opportunities available, we recognise the significant value of local capabilities and expertise on the ground to maximise these opportunities.
As of 30 June 2023, QIC had $102.2 billion in assets under management, with QIC Private Equity managing more than $8.9 billion.
