Pacific Current Group Limited: Invests in Avante Capital Partners

Pacific Current Group Limited (ASX:PAC), operating under the name Pacific Current, a renowned global multi-boutique asset management company, has unveiled a momentous strategic initiative. The company has entered into a definitive agreement to acquire a minority equity stake in Avante Capital Partners (Avante), an investment management firm specializing in private credit and structured equity. Avante is headquartered in Los Angeles, California, and was founded in 2009 by Jeri Harman.

Avante has established itself with a unique vision of diversity-driven private markets management. It primarily serves top-tier sponsors and management teams in the U.S. lower middle market, offering private credit and equity solutions to high-quality companies with strong management teams and attractive financial profiles. Avante's investment scope spans various segments of the capital structure, including unitranche debt, synthetic unitranche debt, 2nd lien debt, mezzanine debt, and minority equity. Since its inception, Avante has deployed nearly US$1 billion in capital.

Pacific Current's investment in Avante involves the acquisition of a 24.9% equity interest for a total consideration of up to US$40 million. The payment structure includes US$15 million upon closing, an additional US$13 million one year after closing, and a potential further investment of up to US$12 million contingent on achieving specified growth milestones. This strategic investment is expected to be accretive for Pacific Current, with estimated management fee earnings ranging from US$1.5 million to US$2.5 million in CY24.

Notably, Avante's existing leadership, including its founders and principals, will continue to oversee the firm. There are no anticipated changes to Avante's strategies or day-to-day operations as a result of this equity stake acquisition.

In summary, Pacific Current's investment in Avante Capital Partners represents a strategic step towards diversifying its asset management portfolio and expanding its presence in the private credit and structured equity investment space. This move aligns with Pacific Current's commitment to providing unique investment opportunities and enhancing its financial performance in the years ahead.

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