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.
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
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.
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 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.
- Robert Bruce 24 yrs Experience
Robert is the Head of Research and Portfolio Manager for the Consumer Staples, Consumer Discretionary, and IT&T sectors. Prior career at CLSA, UBS Warburg, Kaplan Funds Management and Westpac Institutional Bank He joined Acorn Capital in 2014.
- Paul Palumbo 16 yrs Experience
Paul is the Head of Portfolio Implementation and Portfolio Manager/ Analyst for the Healthcare and Biotechnology sectors. Prior career at PwC & IBM Business Consulting. He joined Acorn Capital in 2007.
- Rick Squire 25 yrs Experience
Rick is a Geologist with 25+ years of experience in the resources industry. He joined Acorn Capital in 2016 as Portfolio Manager for Resources & Energy. He previously held positions at Deutsche Bank, TrailStone Group, The University of Melbourne, Monash University and Acacia Resources (now AngloGold Ashanti).
- Karina Bader 19 yrs Experience
Karina is a Geologist with 19+ years of experience in the resources industry. She joined Acorn Capital in 2009 as Analyst for Resources & Energy sectors. She previously held positions with Great Central Mines & Plutonic Resources.
- Ben Dalling 26 yrs Experience
Ben Dalling is the Portfolio Manager for Industrials and Financials sectors. He joined Acorn Capital in 2014.
- Brian Gan 6 yrs Experience
Brian Gan is the Analyst supporting the Portfolio Managers across the COnsumer Staples, Consumer Discretionary, IT&T, Industrials and Financials sectors. He joined Acorn Capital in 2015.