Quadrant Growth Fund lives up to its name

Only 18 month ago, Quadrant Private Equity had no trouble raising $400 million for its Quadrant Growth Fund, a vehicle to be led by managing partner Justin Ryan.

The firm had outgrown the circa $50 million SME/venture targets that Ryan was being sent away to snap up and beat into shape, leaving chairman Chris Hadley and his chosen ones, Marcus Darville and Jonathon Pearce, free rein at “Big Quadrant”.

Thing is, Big Quadrant’s not getting any bigger by virtue of any stellar operating performance. Its portfolio of mid-cap consumer plays, which leans heavily into the leisure thematic, is uniquely positioned for maximum COVID-19 hardship. Its outdoor advertising business, QMS, is buffeted by the precipitous fall in traffic on roads and at airports. Journey Beyond, its assemblage of interstate trains and boat cruises is no growth asset with closed borders. Rockpool Dining Group is closed in Victoria, as are its gyms Fitness First, Jetts and Goodlife.

Meanwhile, Ryan just floated online cosmetics retailer Adore Beauty, which only 13 months ago Quadrant Growth Fund paid approximately $60 million for 58 per cent of. In this month’s IPO, Quadrant is banking $137.7 million for just a quarter of Adore, leaving it with 32.5 per cent of the company worth $207 million and escrowed for just 12 months. Conservatively, Ryan has turned $60 million into $344 million. Better than a five bagger – and realised in just one year.

Evidently, growth and venture investing is having its moment and leisure and tourism will be back. But if Quadrant was intending to hedge its fortunes, it unambiguously succeeded.