Pacific Road Capital Plans $500M Fund

Australian mining-focused buyout firm Pacific Road Capital Management is planning to raise $500 million for its second fund. The firm will begin fundraising in the next few months, Reuters reported. The firm has invested in roughly 11 mining companies via its $320 million Resources Fund 1.

(Reuters) – Australia’s Pacific Road Capital Management, one of the country’s three mining-focused private equity firms, plans to raise a new $500 million buyout fund, making it one of the few local buyout firms to try to raise funds in a tough environment.

Pacific Road, which has interests in about 11 mining companies through its $320 million Resources Fund 1, will begin fundraising for Fund 2 in the next few months, Investment Director Mike Stirzaker told Reuters.

“We will be coming back to the market in the next few months,” Stirzaker said in an interview at an industry conference.

Stirzaker said Fund 1 has around 80 percent foreign investors, mainly in the United States including large college endowment funds, and he expects a similar proportion of offshore interest in the new fund.

Pacific Road will be tapping offshore investors at a time when fundraising in the local market has proved very difficult as Australian pension funds pull back from investing in the $23 billion private equity sector.

Pacific Road is one of only a handful of global mining-focused buyout firms, all of them with Australian executives, a large proportion of U.S. investors and investments around the world.

The others are Perth- and Denver-based Resource Capital Funds, formed by ex-Rothschild Australia executives, and the $2.3 billion Sentient Group, formed by ex-AMP executives, with offices in Sydney and Montreal.

(Editing by Balazs Koranyi)