Covest Capital

In Australia, 70% of small and medium businesses are owned by baby boomers. Two thirds have succession issues and will be forced to sell their business if they want to retire. A tidal wave of businesses for sale is starting to reach the Australian market; there are not enough buyers. CoVEST Capital, a private equity firm, was established to capitalise on this phenomenon and leverage from the significant market potential to facilitate ownership transition through acquisition, expansion and the roll up of businesses. We invest in businesses with revenues between A$5m and $50m. The Fund’s objective is to grow revenues through accelerating growth strategies, lift profitability and make the investee companies attractive for trade sale or IPO thus providing the Fund with superior returns. The Fund will provide growth capital and bring in additional experience and expertise. Where owners are looking to exit, the Fund will provide an exit pathway, while allowing those owners to benefit from the increased value that the Fund has identified during its assessment. This is undertaken by the Fund’s Partners and where the assessment indicates the investment requirements are met the business will need to undertake the Investment Readiness Program (IRP). The aim of the IRP is to identify, and commence the implementation of, initiatives to increase profitability and create platforms for accelerated growth. The Partners work with staff to identify performance improvement opportunities and quantify the profit impact. An increased profit will result in a higher sale price. Prospective investee companies, especially those that fall outside the target returns, will be charged a professional fee, parts of which may be on an at risk basis. Post investment the Partners are actively involved in managing the business to ensure targets are met. Through their retained shareholding owners will benefit from the value uplift when the business is sold at a much higher enterprise value.