IFM Investors and Aconex founder Leigh Jasper co-invest in Zuuse

The $160bn IFM Investors and Aconex founder Leigh Jasper have teamed up to co-invest in Melbourne construction software platform Zuuse.

The $160bn IFM Investors and Aconex founder Leigh Jasper have teamed up to co-invest in Melbourne construction software platform Zuuse.

The $160bn IFM Investors and Aconex founder Leigh Jasper have teamed up to co-invest in Melbourne construction software platform Zuuse, marking the second deal struck by the investment giant’s private equity arm.

IFM will pay $50m for a stake in Zuuse of over 30 per cent with two of its private equity team, Jeremy Larkin and Adrian Kerley, to join the private company’s board alongside Mr Jasper who will also invest his own money in the tech operator.

Zuuse, chaired by AdBri director Geoff Tarrant and with 70 staff, provides digital claims management under the Payapps and GCPay brands for 21,000 clients in the global construction industry as customers switch from a historic reliance on hard copy paperwork to run their operations.

Mr Larkin, an executive director of IFM, first worked with Mr Tarrant at Deutsche Bank in the 1990s. The two remained friends and when IFM heard Zuuse was considering a capital raising, it opened talks about putting its own money into the company alongside Mr Jasper who enjoyed a $100m payday when his construction management software company Aconex was bought by global software giant Oracle in 2017.

“We had been talking to Leigh in 2019 about various opportunities we could work on together. It made sense for us to reach out to him as soon as the Zuuse opportunity was identified,” Mr Larkin told The Australian.

IFM executive director Adrian Kerley, a former private capital head at Commonwealth Superannuation Corporation, praised the experience of Mr Jasper who teamed up in September with the venture capital arm of the billionaire Tarascio family, one of the nation’s largest property developers, for a new tech fund.

“He assisted us reviewing the investment and helped us to clearly articulate the growth plan going forward. He brings software and construction expertise and will also have some skin in the game.”

The deal is the second struck by IFM’s private equity team — after My Plan Manager in July 2019 — which is led by its global head, former CHAMP Ventures executive Stuart Wardman-Browne. It marks the first investment for IFM’s Growth Fund which targets opportunities in a $10m to $250m bracket, acquiring stakes between 30 per cent to full control.

“If you look at the data there are only about 1300 companies with revenue of more than $250m and not only do you have the large domestic private equity players — PEP, Quadrant, BGH — but you also have large offshore players like KKR, Carlyle, TPG, Affinity and fly-in fly-out players all chasing those 1300 companies,” Mr Kerley said. “There are 20,000 to 25,000 companies in the $10m to $250m revenue range, so it’s a great hunting ground.”

IFM is also developing a long-term private capital strategy where it will invest more than $300m and target “larger economically durable assets” which it plans to hold for more than a decade.

While it has no fixed timeline for how long it will remain a Zuuse investor, IFM said it was focused on the tech company boosting its US business with a trade sale or sharemarket float potential avenues for its eventual exit.

“Our exit could be to a global trade player or the public market. They’re the two likely exit paths,” Mr Larkin said, noting Oracle’s purchase of one of Zuuse’s rivals Textura in 2017.

“We have flexibility to hold these investments longer than a typical private equity firm. We’ll judge what is the right time to exit based on what is best for the company and our investors.”