Stafford Chosen for $220M PE Co-Investment Mandate

Stafford Capital Partners, a prominent Australian private equity firm, has been selected by First Super, a leading Australian superannuation fund, to manage a new co-investment mandate valued at $220 million. This development signifies a long-standing and successful partnership between the two entities.

The agreement significantly expands Stafford’s co-investment program, which was established in 2010 in collaboration with First Super. Since its inception, this program has demonstrably generated strong returns, exceeding an internal rate of return (IRR) of 20% per annum.

The renewed mandate allows for a novel “Evergreen” structure. This means that proceeds generated from successful exits (sales of investments) can be reinvested into new co-investment opportunities. This approach enables Stafford and First Super to capitalize on promising emerging companies within the Australian small and medium-sized enterprise (SME) landscape.

Stafford’s private equity team has secured $340 million in new capital for co-investment endeavors in the first half of 2024. This includes the $220 million mandate from First Super and a separate $250 million global co-investment mandate secured earlier in the month with HESTA, another Australian superannuation fund.

The recent acquisition of these co-investment mandates underscores Stafford’s reputation for excellence within the Australian private equity sector. The firm’s proven track record, combined with its focus on the domestic SME market, has positioned it as a preferred partner for superannuation funds seeking exposure to this high-growth asset class.

A noteworthy aspect of the agreement with First Super is the emphasis on leveraging a “specialized ESG [environmental, social and governance] diligence framework.” This framework suggests that Stafford and First Super prioritize responsible investment practices, integrating environmental, social, and governance considerations into their co-investment decisions.

The ongoing collaboration between Stafford Capital Partners and First Super exemplifies a successful model for co-investment within the Australian private equity landscape. The renewed mandate’s “Evergreen” structure, coupled with a focus on ESG principles, paves the way for continued collaboration and potentially significant returns for both parties.