Acorn Capital Expansion Platform II

INTRODUCTION

OVERVIEW

ACORN CAPITAL EXPANSION PLATFORM II (ACEP II) IS DESIGNED TO CAPTURE THE ATTRACTIVE RETURNS

ASSOCIATED WITH  INVESTING IN PRIVATE EARLY/EXPANSION STAGE OPPORTUNITIES

VIA A TAX EFFECTIVE STRUCTURE

INVESTING IN INNOVATION

Acorn Capital Expansion Platform I (ACEP I) was designed to provide investors with the opportunity to support and benefit from the innovation underpinning early/expansion stage Australian companies across all industries. ACEP II continues this investment thesis.

Innovation exists across all industries and is not exclusive only to biotech and fintech. From Acorn Capital’s experience, it exists across all industries and includes business processes, being first to market, IP and brand.

INVESTMENT OBJECTIVE AND STRATEGY

ACEP II is a wholesale offering that provides investors access to private early/expansion opportunities in innovative, emerging Australian companies via a tax effective structure.

ACEP II is expected to consist of a high conviction portfolio of 15-20 investments that aims to generate attractive returns, targeting an IRR of greater than 20%, post fees.  Subject to performance and realisation opportunities, the Fund aims to make distributions from the realisation of portfolio holdings corresponding to contributed capital within approximately 3 years from the first committed capital drawdown.

PROVEN TRACK RECORD 

Since 2009 the Investment Team have identified unlisted investment opportunities and utilised their operational experience to assist companies’ development to generate superior returns for investors:

  • $279m invested capital into unlisted securities
  • 57 private investments, including 15 pre-IPO
  • 39 liquidity events including 31 IPOs
  • 12 years of investing in private markets
  • 38.8% Gross IRR for the Acorn Capital Emerging Growth Strategy (1)
  • 27.4% Gross IRR for Acorn Capital Private Opportunities Fund (2)
  • 13.5% Gross IRR for ACEP I (3)

1. IRR calculated to time of the liquidity excluding investments that have not reached a liquidity event. Where liquidity event is an IPO, it is calculated on the basis of the VWAP on the first day of ASX trade for the security. 
2. Registered Venture Capital Limited Partnership 
3. Consisting of the Acorn Capital Expansion Fund, a registered ESVCLP, and the Acorn Capital Expansion Trust. Investment period completed in June 2021. Approximately 1/4 of investments still recorded at cost. 
4. ESVCLP subject to conditions and under application. Refer to IM relating to the ESVCLP.

Why INVEST IN ACEP II?

  • Large and diverse investment universe – Obtain access to an exciting Australian asset class distinguished by its stage of development and innovative characteristics.
  • Proven track record – Strong track record of performance across both listed and unlisted companies since 2009.
  • Experienced team of industry specialists – Co-invest with a team who have successfully leveraged the investment capabilities across listed and unlisted companies for more than 12 years.
  • Extensive networks – Access to early/expansion, venture opportunities originated through Acorn Capital’s established and extensive industry network developed over 20+ years.
  • Multi Industry exposure – Gain exposure to a diverse range of companies across sectors which may include Industrials, Consumer Discretionary, Healthcare, Materials and Telcos as well as IT and Fintech.
  • Tax advantaged investment structure – Eligible investments completed in the Early Stage Venture Capital Limited Partnership are CGT and income tax free, and provide a 10% tax offset to investors under certain conditions. These factors may result in tax effective returns for high-net-worth investors.
  • Portfolio Diversification – High growth target return profile that is differentiated to listed equity returns.
  • Growth orientated – Invest at the early/expansion stage of a company’s development.
  • Alignment of investor interests – Acorn Capital management and shareholders have committed more than $10m to ACEP II. Carried interest is only paid to Acorn after investors receive their preferred return.
  • Application of ESG and UNSDG principles – ESG and active stewardship are an integral element of the investment process.

INVESTMENT PHILOSOPHY

Significant innovation exists across all Australian industries.  Innovative emerging companies often have limited access to capital and lack a capability to effectively deliver on the potential growth through their innovation.  These resultant market inefficiencies provide potential for enhanced investment returns. Acorn Capital believes that investment in innovative companies at an early stage of development can deliver superior risk-adjusted returns to investors.

Acorn Capital, through its investment process, seeks to identify strong management teams with ambition and evidence of innovation in their product or service.  Innovation can lead to a sustainable, large scale competitive advantage.

FOR Further information

For further information on the Fund contact Kate McDermott, Head of Distribution.

KEY FUND TERMS

 

Applications Open September 2021.

Investment Universe Unlisted emerging Australian companies, Pre-IPOs, IPOs and listed microcaps.

Investment Vehicles Early Stage Venture Capital Limited Partnership and a Managed Investment Trust. 

Target Fund Size Up to $100 million.

Minimum Investment $100,000.

Management fee 1.50% p.a. plus GST on committed capital.

Carried interest 20% of distributions after Preferred Return.

Preferred Return 6.5% p.a.

Trust Distributions  Annual, subject to tests.

Redemptions  No redemptions.

Investor Eligibility Wholesale investors only.

RELATED DOCUMENTS

Fund Factsheet
 

 

 

 

ACORN CAPITAL’S TRACK RECORD OF SUCCESS AND INVESTMENT EDGE

ACEP II will allow it to access differentiated investment opportunities as compared to the S&P/ASX Small Resources Accumulation Index.

Acorn has significant experience investing in emerging growth companies.

ABOUT ACORN CAPITAL

STRONG TRACK RECORD

 

  • 57 unlisted situations
  • Liquidity on 39 investments
  • Strong track record on unlisted investments across all strategies

PROVEN INVESTMENT CAPABILITY IN EMERGING COMPANIES

 

  • Capability to select and invest in emerging companies through all market conditions
  • A demonstrated investment process
  • Identify the “best in class” investments across all industries

EXTENSIVE NETWORKS

 

  • Extensive networks and brand recognition across the Australian entrepreneurial ecosystems
  • Ability to leverage relationships

TAX ADVANTAGED & ALIGNED INVESTMENT STRUCTURE

 

  • ACEP2 includes an ESVCLP (CGT and Income tax free)
  • Carried interest/performance distributions are only payable when hurdles are met
  • Acorn Capital management and shareholders will commit more than $10 million towards ACEP2

Acorn Capital was established in 1998 as a specialist investment manager in emerging Australian companies. Acorn Capital distinguishes itself through its relatively large research and investment team with expertise across all industries, as well as its provision of expansion capital to developing companies.

Acorn employs the largest microcap / emerging companies investment team in Australia. The team comprises 10 investment management professionals with combined industry experience of 160 years. 

INVESTMENT TEAM

IMPORTANT NOTICE

 
This document is prepared, issued and furnished on a confidential basis to a limited number of sophisticated investors who are wholesale clients (as defined in section 761G of the Corporations Act). The information contained herein should be treated in a confidential manner and may not be reproduced or used in whole or in part for any other purpose, nor may it be disclosed without the prior written consent of the Acorn Capital Ltd. This document is being provided for preliminary discussion purposes only, in relation to certain prospective investment opportunities. It is not intended to be complete or definitive. Any information provided in this document is subject to and superseded by the relevant investor presentations and information memoranda, as well as the definitive documentation governing ACEP II. Whilst the information contained in this document is believed to be reliable, its accuracy or completeness cannot be guaranteed, and no responsibility for the accuracy or completeness of such information is assumed by Acorn Capital Ltd or any other person furnishing this document. Past performance is not necessarily indicative of future results. There can be no guarantee that targets or objectives set out in this document will be met. Any financial product advice provided in this document is general financial product advice only, and does not take account of the objectives, financial situation or needs of any person.

Contact Acorn

Acorn Capital Limited

Level 4, 2 Russell Street
Melbourne VIC 3000

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Phone:

+61 3 9639 0522

Fax:

+61 3 9639 0515

Email:
info@acorncapital.com.au

LinkedIn:
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JV Partner. Further information about our partner can be found at our partner’s website Australian Unity.

Level 4, 2 Russell Street,
Melbourne Vic 3000
Australia

Phone: +613 9639 0522
Fax: +613 9639 0515
Email: info@acorncapital.com.au

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