Auctus’ (ASX:AVC) latest investment it offered to its clients, pet retailer PETstock, resulted in over $50 million in applications.

Auctus is an ASX-listed investment manager which specialises in private equity opportunities ranging from medtech to US college student housing.

Its latest opportunity is in pet retailing having established a Pet Fund last November.

The fund’s first move was for PETstock and it received applications in excess of $50 million from wholesale, high net worth and Family Office investors.

While PETstock has been around since 1991, this marks the first time it received external equity capital outside family and friends of the founders.


PETstock capitalising on demand for pets

PETstock is the second largest pet retailer in Australia with 170 stores and, like other companies in the pet sector, has seen good times recently.

Auctus managing director Campbell McComb says COVID-19 has led to increased pet adoption rates and this has been good news for companies in this trade.

“The last 12 months has been great for pet companies globally,” he told Stockhead.

“The lockdowns around the world has led to people buy more pets and the humanisation of pets has been an ongoing theme.

“So it’s exciting for us to be involved with such a high quality company like this as they continue their growth path.”


Private equity running hot

McComb also put it down to the demand for private equity opportunities. He said there was a view emerging that public markets were appearing overheated.

“I think investors are certainly keen on those sort of 3-4 year transactions where there’s some solid, 20+ per cent returns,” McComb explained.

“They’re looking at equity markets more generally and perhaps looking at them as a touch overvalued.

“The multiples paid in the private market seem to be lower than listed market so there’s greater value and therefore greater return across that 2-5 year frame.

“So we’ve seen quite a bit of demand across a lot of our funds and we expect that to continue over the next year or two.”