iPartners Emerging Equity Fund

The iPartners Emerging Equity Fund targets a 20% per annum return net of fees.

It provides investors with exposure to a diversified portfolio of high-performing growth equity assets across various industries.

Launched during a period of valuation resets and extended private company lifecycles, the Fund capitalises on attractive entry points and reduced competition.

iPartners leverages its unique, proprietary deal flow, sourced through its diverse business structure and extensive network. A strong, experienced team with expertise across the entire investment process manages the Fund. While this is iPartners’ first equity fund, the management team has a proven track record managing other funds. The Fund focuses on the underserviced growth equity space, offering a $10,000 minimum investment, no capital calls, and diversified asset exposure. Liquidity is facilitated through the iPartners platform’s secondary trading functionality.

The iPartners Emerging Equity Fund (Fund) is the first growth equity fund offered by iPartners Funds Management Pty Ltd (iPFM). The Fund targets a return of 20% p.a. (net of fees) and offers investors with exposure to a diversified portfolio of high performing growth equity assets across a broad spectrum of industries.

The Fund is being launched at an opportunistic time when investors can benefit from the following conditions:

Valuation reset: The average valuation for Series C and beyond rounds have decreased by 47% from peak pricing seen in 2021, presenting more attractive entry points, structures, and ability to generate significant returns over the medium term;

High growth companies are staying private longer: Providing opportunities to invest in significantly de-risked growth assets with less funding competition than listed equity markets.

IPO candidates seek private investment: Until listed equity markets recover, and the IPO window opens, private markets present an excellent opportunity to support and invest in high quality companies gearing up for an IPO; and

Consistent outperformance: Australian private markets have consistently outperformed listed markets in the medium to long term, offering a robust investment landscape.

The Fund offers unique characteristics such as:

Unique proprietary deal flow: The iPartners business is diverse and unique in its structure, meaning that deal flow is constant and proprietary to the business. The origination network is deep and wide as the Portfolio Managers are shown opportunities from an array of avenues such as the multidisciplinary team at iPartners, their respective networks, clients and investors of iPartners, a lot of the time before such opportunities hit the market;

Strong team with deep expertise: Our team excels across all aspects of the investment process from origination, detailed due diligence and valuations, structuring, and ongoing monitoring and are aligned in generating strong returns for investors. The Portfolio Managers have diverse experience and complimentary skillsets meaning that the team's capabilities expands the entire investment process;

Proven track record: While this is the first iPartners equity fund, iPFM manages six other funds (FUM ~$370m) with a strong track record across various asset classes;

Sweet spot in growth equity: The Fund is positioned in the underserviced growth equity space, where many growth funding peers have minimum investments of $10 – $30m. This allows us to tap into a unique market segment with high potential and expected returns; and 

Stringent governance: iPartners prides itself on its stringent governance framework developed by industry leading legal experts.

The iPartners Emerging Equity Fund (Fund) has been established to offer investors exposure to a portfolio of companies, spanning across diverse industries, all sharing a common theme of being in the growth phase of their lifecycle. By leveraging the Manager’s experienced team and broad network, the Fund aims to target strong, risk adjusted returns of 20% per annum by selectively investing in high quality growth and expansion assets that satisfy the Fund’s stringent investment criteria. 

The Fund is a pioneer, both at iPartners, as it is the first equity fund, as well as in the growth equity market given its unique structure, commitment to investor access and liquidity functionality. These features underpin the mandate of the Fund and mirror iPartners’ mantra - being to provide wholesale investors with access to proprietary and institutional grade investment opportunities across the alternative assets spectrum. The Fund’s strategy is based on 6 key pillars: 

1. Investing in established businesses with a strong growth profile, that are profitable or have a pathway to profitability. 
2. $10,000 minimum investment, no capital calls and diversified asset exposure. 
3. Liquidity and rebalancing for the Fund and investors through the iPartners platform secondary trading functionality at regular intervals. 
4. A highly experienced and multidisciplinary Investment Team with deep networks, that dominate every stage of the investment process. 
5. Portfolio managers have skin in the game, aligning with investors. 
6. A co-investment model granting Fund investors with priority allocations in equity transactions. 
   
   

The Investment Team led by Travis Miller, Justin Harsel and Ashlee Zileski, Javier Quintanilla and Liam Volcevski will originate, analyse, structure, and execute select investments for the Fund that meet strict investment criteria. Core to the success of the strategy is the robust 6 step investment process which includes approval by the Investment Committee prior to making any investment (and detailed further in Section 6.4 of this Information Memorandum). The Manager believes that growth equity presents a compelling opportunity for the following reasons: 

• Increased access: High growth companies are looking to stay private for longer and are seeking financial partners with patient capital. With many growth capital funds fully invested; it is an opportunistic time to be deploying capital. 
• IPO Market: Market conditions have prevented quality IPO candidates from pursuing an ASX listing. Some of these companies may require additional capital while listed markets remain closed. This may provide an opportunity for the Fund to invest in high growth assets with appealing structural terms and shorter timeframes to liquidity 
• Compelling Valuations: Valuation multiples for unlisted businesses have significantly reduced from peak 2021 levels. It is estimated that recent series C+ rounds have been discounted by an average of 47% from peak pricing¹. The Manager will seek to capitalise on falling valuation multiples while private company expectations remain depressed. 
• Secondary Sell Down Opportunities: The Manager has seen an increase in the number of secondary offers, with some early shareholders, founders, or professional investors looking to partially liquidate positions. Underlying company fundamentals, including growth trajectory and exit pathways remain strong, presenting an opportunity for the Fund.  
• Attractive Risk vs Return Reward: The Manager believes that the initial entry valuation and risk management is critical when investing to achieve desired returns. The depth of experience across the investment team ensures that this is achieved through structuring of investments, including downside risk management and ongoing advisory and monitoring which will seek to provide investors with an attractive risk vs return reward. 

Importantly, the Fund will primarily invest in private companies which will not be exposed to daily market volatility. The Fund may, however, seek exposure to select handful of listed equity assets on a special situation basis. 

¹ 2023, the State of the Australian Startup Funding – Cut Through Ventures, Folklore Ventures

Investment Objective 

The Fund's objective is to construct a diversified portfolio of emerging growth companies which will generate strong, risk adjusted returns for investors above the Hurdle Rate. 

Investment Strategy 

The Fund will primarily invest in companies that operate within Australia, New Zealand and Singapore and demonstrate a strong growth profile, a scalable 
operating model and a clear exit pathway. 

The strategy of the Fund is underpinned by the Manager adopting a fundamental bottom-up research approach, a stringent 6 step diligence process, as well as 
ongoing and active monitoring and assessment of portfolio companies. 

Portfolio Composition 

The Fund will invest in: 

• Private companies; 
• Pre-IPO companies; and 
• Listed companies. 

Allocation across these sectors will be at the Manager’s discretion.