High profile mining players David Flanagan and Jimmy Wilson have joined a team advising Viburnum on its new private equity fund, backed to the tune of $20 million by a local family office.
High profile mining players David Flanagan and Jimmy Wilson have become part of a new team advising Viburnum on its new private equity fund, backed to the tune of $20 million by the DFD Rhodes family office.
Mr Flanagan, the former Atlas Iron boss who has recently headed lithium plays and is now managing director of broad ranging WA explorer Arrow Minerals, and Mr Wilson, formerly head of BHP Iron Ore have been named as private advisory partners along with indigenous leader Kate George, who sits on the Northern Australia Infrastructure Facility board, and Minnovare co-founder Callum McCracken.
Viburnum was a major investor in mining technology firm Minnovare, which was acquired for more than $100 million by Swedish company Hexagon in early 2022.
Viburnum said the advisory partners will offer diverse skills and experience as the firm seeks to raise up to $300 million for its third mining services-focused private-equity fund.
It is all part of a major transition at Viburnum, as co-founder Marshall Allen steps away from the day-to-day management of the private equity division, which is one of two major offerings by the $800 million fund manager - the other division specialising in ASX company investments.
Longstanding portfolio manager Melanie Hay stepped into role of managing partner, private equity, as the new Viburnum Private III fund was launched.
When first reported by Business News last month, the new private equity fund had already reached a significant proportion of its $70 million ‘first close’ target, having raised about $40 million through two big investors.
It has now revealed that Perth-based family office DFD Rhodes, established to manage the fortune of the late mining services contractor Don Rhodes, was half of that early chunk, along with an as yet unnamed US-based institution with experience in the resources sector.
DFD Rhodes chief executive Matthew Keady confirmed the family office's cornerstone investment.
"I have known the Viburnum guys for many many years," Mr Keady said.
DFD, which manage a fortune estimated to be worth more than $900 million based on interests in iron ore royalties, agriculture and investments, was an early investor in the Viburnum High Conviction Fund, launched in 2016 and run at the time by the ASX equities division within the Perth-based fund manager.
The new advisory partners will provide advice to the new fund’s investment committee and may also invest in portfolio companies alongside Viburnum as well as potentially work directly with those businesses, including as directors.
Founded in 2007, Viburnum is the third biggest equities focused fund manager based in WA behind Cottesloe’s Packer & Co with $2.1 billion and Resource Capital Funds with about $1.45 billion managed locally.
Ms Hay said the introduction of the advisory partners was more an evolution of the business rather than part of the leadership tranistion.
"We have not used advisory partners in a formal sense but over the years we have established relationships with a variety of senior executives," she said.
"We have drawn on that experience over time, we have always had that network.
"This is more of an evolution of Viburnum in that we are looking to formalise those relationships."
Ms Hay said that the role of the advisory partners group would likely change as the new fund progresses from raising capital and investing it to managing its portfolio, which will again be focused on mining-related products, services and technology.
She said that Viburnum was open to its partners investing alongside the fund, and understood that some investments would be more attractive to individual advisory partners than others on the basis of their background and expertise.
"I think we see there could be a lot of value to portfolio company boards to have some of these executives taking more of an oversight role as part of the their board going forward," Ms Hay said.
"It is something of a value add to our fund at this stage.
"It could grow in terms of other advisers and could be extended to other funds in the future.
"At the moment we see them working with us to help identify good opportunities for the fund and, over time, the role may change."
Ms Hay said it was a significant change for Viburnum to have a local cornerstone investor for the new private equity fund, with previous private equity funds largely formed with capital from the US.
She said the new fund was looking to add more Australian investment.
"We continue to talk to a range of investors, mainly family offices in Australia, and looking to conclude first close at the end of the first quarter next year," Ms Hay said.
"It is exciting for us to have a local backer.
"We do feel now its time to raise in Australia, given we have a well-established track record and well-defined strategy."
