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A fund backed by Rich Lister Rhonda Wyllie plans to raise about $350 million from other wealthy family offices in a bid to supercharge a war chest for making strategic investments in large listed companies.
Ms Wyllie helps manage a fortune her late husband Bill left her and their five children a decade ago.
The Wyllie family owns 34 per cent of Viburnum Funds, which has for the past few years been mostly selling investments and hoarding cash.
But that trend is beginning to change, as the fund manager tips the worse of the resources downturn has passed and gears up to position itself for an inevitable upswing.
Viburnum Funds executive chairman Craig Coleman, who owns 20 per cent of the fund manger, said he wanted to expand funds managed by its core strategic growth fund from about $150 million to $500 million.
"We have got approval to market that fund to select family offices," Mr Coleman said.
Mr Coleman will begin marketing the fund to a select group in July.
Big returns
Growing the fund, which has delivered a 29 per cent yearly return in the past five years, is part of a strategy by Mr Coleman to target larger companies with a market capitalisation over $100 million.
The fund holds no more than 10 positions and usually acquires stakes of between 10 and 40 per cent.
The fund has an activist mandate. Mr Coleman and his team either work with management to grow the business or provide a capital injection to fix a balance sheet.
"It's not a typical investment where you sit on your hands and look at the screen. We are active," Mr Coleman said.
In the past five years the fund has sold nine investments including coffee retail group Dome, Vision Eye and Amcom Telecommunications, which was acquired by Vocus last year. It owns stakes in about half a dozen companies including Pulse Health and Rubik Financial.
Mr Coleman wants to target companies in the ASX 300 index, or companies with a market capitalisation of more than $100 million.
Rather than investing $5 million for a position, it would more likely be $30 million, he said.
Growth sectors
He said it was eyeing potential "pockets of growth", which included the health, technology and domestic tourism sectors.
"It's taking positions in bigger companies with bigger earnings potential," Mr Coleman said.
Mr Coleman is eyeing five possible deals and expects two or three will materialise this year.
The strategic growth fund is one of three planks the funds management group operates.
It operates a high conviction equities fund, which is capped at $200 million and managed by former Cooper Investors' executives Alex White and Edmon Odza.
Viburnum also manages an energy and mining services-focused private equity fund, which is also eyeing acquisitions.
US funds keen to invest
Mr Coleman said the large investors that backed its private equity plays, which are mainly in the US, were showing increasing appetite to do deals.
"The sentiment from investors, particularly our US LP investors, is that they are quite happy now to cautiously invest," Mr Coleman said. "That wasn't the case 12 months ago."
The private equity fund is in the final stages of bedding down a deal worth about $100 million.
Marshall Allen, who owns 20 per cent of Viburnum Funds, and manages the private equity arm, said he was considering an increasing number of deals.
"We are certainly spinning the wheel," Mr Allen said.
Surviving the stress test
Mr Allen said mining and energy services companies had been "stress tested" after spending the past couple of years battening down the hatches to survive.
"You know that they are still alive," Mr Allen said. "The others have been weeded out."
The fund is targeting businesses that benefit from the mining industry's cost-cutting drive.
Vibrunum took a significant stake in Perth mining services group Minnovare in March.
The company develops technology to simplify underground drilling on mine sites, which significantly cuts the time needed to set up drill rigs and dramatically improves productivity.