Industry Funds Management (IFM) is seeking more than $425 million for its fourth Australian private equity fund-of-funds, using the amount raised for its third fund-of-funds as a benchmark.

As reported last week, Wilshire Associates is raising $250 million at the same time, but IFM’s private equity chief, Judith Smith, rejects the notion held by some that weight of money is causing a bubble in domestic private equity. “They said that back in 2001 as well,” she said. “We target a net internal rate of return of 15 per cent over the five year life of our funds, and our second and third funds are active and tracking very well towards that.” Smith said some commitments from investors in the previous three funds had already been made, with a closure expected early next year. Big supporters of the IFM domestic and global private equity fund-of-funds in the past include industry funds such as STA (now part of AustralianSuper), Vision Super and HESTA. Smith said buy-out and venture capital managers would again be the focus of the new fund, and the menu would again number in the “mid-teens”.

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