Pacific Channel, a leading Asia-Pacific funds management firm, has launched Australasia’s first venture capital continuation fund. The move follows a trend that has gained substantial traction in the United States, where similar funds secured over US$52 billion in investment last year.
The new Pacific Channel Opportunities Fund offers investors access to a portfolio of seven established companies from their original Fund I, which has already delivered a realised Internal Rate of Return (IRR) of 101%. These carefully selected companies, averaging seven years in operation, span diverse sectors including healthcare, clean technology, agricultural technology, and horticulture.
The companies include:
Pacific Channel Managing Partner, Brent Ogilvie explains
"These companies represent some of our strongest performing investments. With an average unrealised IRR of 65%, they demonstrate significant growth potential in their respective markets."
The fund is targeting a 20% IRR for investors, reflecting confidence in the continued growth trajectory of these established ventures.
The concept of continuation funds has emerged as a compelling solution to what has become a common challenge in venture capital. Venture capital funds typically operate on a 10-year timeline, but some promising companies benefit from additional time to reach their full potential. Major US firms including General Catalyst, Lightspeed Venture Partners, and New Enterprise Associates, have launched similar funds which have shown strong performance according to recent Morgan Stanley research.
For investors, the Opportunities Fund presents several advantages. Unlike traditional venture capital investments in early-stage startups, these companies are already established with more proven business models and experienced management teams. This maturity typically suggests a shorter path to potential returns. Additionally, investors gain access to a diversified portfolio of companies that would be difficult to invest indirectly.
Mr Ogilvie adds
“The launch of this fund represents more than just a new investment fund; it shows our venture capital ecosystem is developing and maturing. By adopting and adapting successful models from the US market, Pacific Channel is creating new opportunities for both companies and investors across Australasia.”
"As the first of its kind in Australasia, the Pacific Channel Opportunities Fund sets a precedent for how venture capitalfirms in the region might approach portfolio management and deliver enhanced investor liquidity in the future,” said Mr Ogilvie.
