15th Jan 2013. Mark Carnegie’s venture capital fund has announced it has secured a 55% stake in Melbourne-based asset management software firm Assetic, for A$10 million. His Carnegie Venture Capital Fund, an Australian Government IIF-backed fund and Carnegie Private Opportunities Fund have made the latest investment.
Assetic tuns several million sales a year and is growing at 40 per cent per annum. It was started nearly a decade ago by Ashay Prabhu and Joel Brakey, who own the balance of the company.
Assetic was originally incorporated as a strategic relationship between software engineering firm Baseline Solutions and Asset Management specialist ACEAM. ACEAM and Baseline worked with local government partners to develop a proprietary and integrated suite of Asset Management products. This suite meets the needs of these agencies from the perspective of managing public infrastructure – engineering, economic and accounting systems. The prediction tool in particular assists these organisations to develop long-term infrastructure management plans that enable better decision making in funding allocations.
Assetic counts local councils of Latrobe City, Victoria, Glenorchy City, Tasmania and Gosford, NSW as clients, will be expanded into private sector markets and other utility sectors like water and electricity.
Mr Carnegie told The Australian Financial Review that he “easily” expects to grow the business to five times its current size, but there is scope to grow it up to 10 times.
“We see there is a five-times expansion without doing anything more than putting some real muscle behind who they are selling to at the moment,” he said.
“I think this can be done in four years. They always say you want three to five times your money in three to five years in venture capital. My guess is this business will be five times as big in four years. We also think there are international expansion opportunities, especially in the UK, because we see a series of trends in the UK that look a lot of like Australia.”
“There is a whole lot of infrastructure money available among the superannuation funds who are looking for ways to earn a return so as long as they understand the assets … and we think these guys are at mission control… it gives people better understanding of infrastructure. The macro bet here is there is somewhere between $10 and $50 trillion of repairs and maintenance on infrastructure required today in the world, and these guys have been able to get the dominate position in terms of providing information about this to local councils. We think we have got something really exciting.”
Assetic’s “outstanding growth rates” and “position as the leading supplier of strategic asset management software to local government in Australia were key attractions for investors,” according to Antony Lynch, director of M&A Partners, which advised Assetic’s owners on the equity sell-down.