GRESHAM PARTNERS
Wesfarmers has a 50 per cent interest in Gresham Partners Group Limited, the holding company for the Australian investment banking activities of Gresham Partners. Gresham, which has offices in Sydney, Melbourne and Perth, is focused on the provision of corporate advisory services and the management of property and private equity funds.
Wesfarmers’ interest in Gresham generated pre-tax earnings of $3.9 million with a further $12.8 million contributed through revaluations in Gresham’s private equity funds, in which Wesfarmers holds interests.
Gresham’s corporate advisory business focuses upon mergers and acquisitions, industry consolidations and the provision of strategic financial advice to a wide array of Australian and international businesses.
The advisory business has benefited from its active participation in a highly active mergers and acquisitions market over the past twelve months and was successful in completing a number of high-profile and large-scale transactions for its clients.
In funds management, Gresham manages a number of property and private equity funds with mandates to invest in Australia and New Zealand.
In property, it has established three funds with total committed capital of more than $270 million. These funds provide financing for a range of real estate developments in Australia.
In private equity, Gresham has established two funds, with a combined total of more than $500 million of committed capital. These funds are focussed on leveraged buy-outs of medium sized commercial businesses with clearly defined development prospects.
In addition to its shareholding in the Gresham Partners Group, Wesfarmers committed $100 million to the first private equity fund, which was established in 1999; and committed $150 million to the second fund in 2005.
Wesfarmers is engaged in the Investment Committee of these private equity funds, and members of its Business Development team are, from time to time, seconded to Gresham Private Equity.
The private equity funds are closed-end funds which aim to exit all investments, returning net proceeds to investors, within 10 years of inception. To date, the funds have made 13 investments, of which 7 have been realised.
In 2006/07 the first fund divested its interests in Raywood, a wireless dispatch and GPS vehicle location systems provider; and subsequent to year end, Norcros, a UK-based construction and building material supplier.
The second fund continued to deploy its capital throughout the year making investments in women’s fashion and accessory retailer, Witchery Fashions, and leading printing industry participant Promentum Limited, which has been merged with the earlier printing sector investment in the GEON Group.
Further acquisitions were made in August 2007 in Barminco, one of Australia’s leading underground mining contractors; and Mimco, a boutique designer and retailer of women’s fashion accessories, which is complementary to the Witchery business.
