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Helmsman – a new $45 million fund to provide turn around capital to under performing businesses |
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25 February 2003 KPMG and Macquarie Bank today announced the launch of the $45 million Helmsman Capital Fund. Helmsman is the first turnaround capital fund in Australia that has been able to attract substantial institutional and professional investor support. Investment Director Ian Johnson, said the establishment of Helmsman represents a key step in the development of the turnaround capital sector in Australia. Typically, Helmsman's investees will be established businesses that are able to demonstrate historic profitability, having existing markets and management structures but suffering a liquidity crisis. Helmsman is able to provide fresh capital combined with the business restructuring and crisis management expertise with the aim of stabilising these under performing businesses and restoring viability and going concern value. The board of the Helmsman Capital Fund's Investment Manager is comprised of John Harkness (Chairman), Lindsay Maxsted, (non executive director), Scott Kershaw (executive director), Ian Johnson (executive director), Anthony Abraham (executive director) and Douglas Potter (company secretary and investment director). Whilst the turnaround sector is in its infancy in Australia, Mr Johnson noted that "in the US there is a sophisticated $US 20 billion funds management industry investing in under performing businesses, but the same access to capital has not been available for Australian companies facing similar circumstances. Unfortunately, the absence of investors with Helmsman's focus in the domestic market has meant that under performing businesses have at times ended in liquidation, at a significant loss for all stakeholders. Helmsman can provide a lifeline that keeps businesses running while the turnaround takes place, to recover the going concern value of the business". Mr Potter said that the size of the opportunity for Helmsman in Australia is vast:
Mr Potter expects that Helmsman would provide an attractive option as it has the capacity to provide funds for recapitalisation and the ability to partner with owners and professional advisers to develop and implement an integrated recovery plan to stabilise and restructure the business. He noted "that investing in under performing businesses requires a depth of valuation and technical skills, well developed negotiating skills, complemented by a disciplined, and where necessary, a patient approach to investment management". Mr Potter said Helmsman enjoyed the benefits of the complimentary skills brought together under the joint venture between Macquarie and KPMG. "Macquarie has a track record of profitably investing in domestic under performing corporate debt and experience in financial asset management as well as extensive funds management expertise." "This is complemented by KPMG's skills as one of the largest corporate recovery and business restructuring advisers in the Australian market. KPMG has extensive industry specific advisory and specialist business restructuring expertise, which will be at Helmsman's disposal." Mr Johnson said Helmsman's investment objective was to generate returns in line with top quartile venture capital funds. Investments would be made in the range of $2 million to $9 million, typically taking less than a 50% shareholding. He confirmed that Helmsman has capacity to co-invest with a range of investors or raise debt as required, in order to increase the size of potential transactions that it can consider. Helmsman plans to invest the initial $45 million over the next two to three years, before undertaking further fund raising. The term of the initial fund is seven years.
Ian Johnson
Douglas Potter |
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