GQG Partners has completed its acquisition of the minority interests in three US-based affiliates held by Pacific Current Group (PAC).
The transaction was first announced in March, with GQG to acquire stakes in Avante Capital Partners, Proterra Investment Partners, and Cordillera Investment Partners for an aggregate cash consideration of US$71.25 million.
Shortly after, the sale of the three portfolio assets along with the externalisation of the management of the remaining assets to GQG was approved by PAC shareholders in April.
The acquisition represents the foundational investment for the recently launched GQG Private Capital Solutions (PCS) which will focus on providing financing and strategic solutions to mid-market private capital asset management firms.
In an ASX announcement on Monday, GQG chief executive Tim Carver said the transaction accelerates GQG’s foray into private markets.
“Avante, Cordillera, and Proterra are excellent examples of the types of firms and people we will seek to partner with on behalf of our PCS clients,” he said.
Following completion of the transaction, a number of PAC personnel are set to join GQG, including PAC chief executive Paul Greenwood.
He joins GQG as managing director and co-head of PCS and has stepped down as independent director at GQG concurrent with the closing of the transaction.
“We are excited that Paul is taking on a new opportunity to contribute to the growth of GQG and we thank him for the valuable insights and contribution he has made as an independent director,” said GQG chief investment officer Rajiv Jain.
The PAC board also acknowledged Greenwood’s contributions to the firm in the last 18 and a half years as managing director and chief executive, and chief investment officer.
“In the first of those roles, Paul oversaw significant enhancements in the management of the business, financial reporting, and corporate strategy. Paul also spent a considerable amount of energy and time helping investors understand the quality of the company’s portfolio of assets and a strategy biased toward private capital investments,” PAC’s statement read.
“Since becoming PAC’s CIO in late 2014, Paul identified and successfully invested nearly US$300 million in 15 investments which have transformed the portfolio to one that is a sound mix of larger, lower risk investments and selective smaller early-stage opportunities.”
PAC estimates the internal rate of return on the investments made during his tenure surpasses 30 per cent as at 31 March 2023.
“The distributions received from these investments including sale proceeds plus their fair value was approximately 2.5 times the amount of capital deployed,” it added.
It described some of the “outstanding” investments made, including the early-stage investment in GQG which delivered more than 99X on PAC’s total investment.
“The board acknowledges and sincerely thanks PAC’s executive team for their outstanding leadership of the PAC business, and the whole PAC team for their dedication, commitment, and significant contribution made to the running the business, to the maintenance and development of our relationship with PAC’s boutiques, and particularly in execution of the GQG transaction,” it said.
