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Pacific Equity Partners closes A$4 billion Fund IV

27 March 2008

Pacific Equity Partners closes A$4 billion Fund IV

Largest private equity fund raised in Australia and New Zealand Pacific Equity Partners (“PEP”) announced today the closing of its fourth private equity fund, PEP Fund IV. The A$4 billion fund closed on the target date and oversubscribed.

The Fund is more than three times larger than any previous Australasian fund.

PEP Fund IV is the first fund since the firm’s inception in 1998 to be open to meaningful amounts of new investor money. Previously PEP’s funds have been limited to longstanding investors drawn from the top tier of experienced private equity investors.

One of the Founders, Tim Sims, said that he was pleased that PEP’s strategy and position in the market had been endorsed so strongly by existing and new elite investors from around the world, particularly during a time of uncertain economic conditions and against such a strong Australian dollar.

“The established investors very quickly underwrote the bulk of the new fund,” said Mr Sims. “Once they were on board we knew we were good to go but held off on the last tranche until we had committed Fund III."

“We did not invest through the larger part of last year; pricing and debt packages started to look unsustainable. However, finally Hoyts presented us with the opportunity we were looking for and we moved to meet new investors for the balance of the new Fund.

“New investors have worked very hard to get into position since Christmas and we are delighted with the diversity and quality of our new members."

Another Founder, Rickard Gardell noted that “In the current environment, a fund of this size is necessary to address deals much above A$300 million in size. The scale of our fund is ideal for providing vendors with a dependable one-stop solution and very positive for banks who are looking for an uncompromising credit record and big funds in reserve to support investments."

Simon Pillar said that deal selection, execution and a focus on growth had been the source of resilience and success for PEP investments and that this would continue to be the case.

“PEP is a selective investor, reviewing more in confidence more than 100 business opportunities each year,” said Mr Pillar. “We have a large team and all the decision makers on the ground; as a result we have been able to provide low risk reliable responses to potential vendors and management teams.

“We invest in businesses that provide opportunities for us to work with the leadership to achieve full potential, often through acquisition, expanding the market at home and, where appropriate, off-shore and growing revenue."

Paul McCullagh, the fourth member of the founding group, emphasised the real value that a well-conceived investment can create.

“We continue to enjoy strong support from the banks but the really good news is that leverage has played only a modest part in our return profile. The management teams that run our portfolio companies, supported by a clear set of strategic goals and appropriate amounts of equity capital, are responsible for the returns we see in our businesses.

“We believe the private equity model will continue to be a valuable alternative for many vendors and management teams in the current turbulent environment. We are open for business and excited about the opportunities ahead."

ENDS

About PEP

PEP is the most active private equity fund in Australia and New Zealand, providing strategic management experience and capital resources to grow companies in a range of business situations. PEP Fund IV is the largest private equity fund in Australia and the firm has over $4.5 billion of equity funds under management. Since its establishment in 1998, PEP has made 18 portfolio company acquisitions and more than 20 add-on acquisitions at the company level.

PEP currently has 13 companies in its portfolio with combined revenues in excess of $3 billion per annum, spanning industries including food, liquor, technology, financial record-keeping and retail trade. Recent PEP investments include:

* Hoyts Group – A leading cinema exhibitor and advertiser in Australia and New Zealand.

* Veda Advantage – The leading provider of business and financial intelligence services through the use of financial record-keeping, analytics and technology.

* Independent Liquor – A leading manufacturer and distributor of alcoholic beverages in Australia and New Zealand, with a particular focus in the ready-to-drink (RTD) category.

* Australian Administration Services (AAS) – A provider of administration services to the superannuation and retail master trust industries. AAS has been merged with Link Market Services, a share registrar and analytic business also owned by PEP.

Detailed information about PEP’s entire portfolio and its exited investments can be found at www.pep.com.au.

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