Track Record

The Arowana investment philosophy is underpinned by a belief that strong investment returns can be generated whilst maintaining a commitment to sustainability, an entrepreneurial resilience that comes from real life business building experience and a long term investment horizon. Our investment process is time-tested, data driven and forensic. We have demonstrated that this process is not influenced by populist thinking and we are comfortable being contrarian where appropriate. What is uncommon about Arowana is that where others would have given up on an investment, we have persisted and eventually delivered highly profitable returns. This is because our team comprises primarily of seasoned entrepreneurs and operators that have overcome a myriad of challenges to fix, build, scale up and successfully sell businesses.

Since inception not only have we delivered very strong returns but importantly have not realised any investment losses across our various companies or investment funds. We believe our genuinely entrepreneurial culture, focus and never-say-die resilience have been the primary drivers contributing to our results to date.

The Arowana team has bought, fixed, scaled up and exited businesses in sectors as diverse as enterprise software, road infrastructure services, education, power and electrical services, industrial testing, solar energy and asset management. In the process, we have created thousands of jobs and considerable economic value. As with any entrepreneurial journey, it has never been straight forward  and is never linear. We have encountered and had to overcome numerous challenges with every company we have been involved with, including some situations where both external and internal stakeholders considered it be a lost cause.

Today, our investment philosophy and process is guided by our B Corporation certification.  Our commitment to the B Corp triple bottom line of People, Planet and Profit is absolute and impacts every decision we make, including the sectors we will invest in and the type of people we hire.

Under Arowana’s watch and management, many enterprises have overcome significant challenges and flourished. Here is a look at some of our key successes:

• The global enterprise natural language processing AI software company RuleBurst (formerly known as SoftLaw) was a struggling small cap stock listed on the Australian Stock Exchange (ASX). It was privatised in November 2004 by a consortium led by Kevin Chin who became the joint-largest shareholder and the hands-on CFOO of the business. With only 6 weeks of cash to survive, the business was turned around in a mere 9 months and transformed into a global growth story. From humble origins in Canberra, RuleBurst scaled up globally into the United Kingdom, United States and Asia. It achieved a prestigious ranking in the Magic Quadrant report by Gartner as an enterprise business rules engine leader and was acquired by Oracle Corporation in November 2008. RuleBurst’s original consortium of investors received a 13.8x multiple on their fully paid ordinary shares (representing a 93% IRR) and a 2x multiple on their preference shares.

• New Zealand headquartered vocational education group Intueri Education was established by Arowana in June 2010 and initially comprised one college in Christchurch, New Zealand. Within 6 months of acquiring this college, 2 devastating earthquakes condemned the campus building and rendered the business practically inoperable. Where most would have given up, the Arowana team parachuted into Christchurch and rebuilt the business literally from the ground up. In the following 4 years, Arowana orchestrated a buy-and-build programme that saw Intueri’s profits increase 20-fold culminating in a May 2014 IPO delivering a 7x multiple of invested capital and a 129% IRR to Arowana.

• Singapore headquartered, human resources, events and media publishing company HRM Asia became part of the Arowana operating companies stable in April 2013. Subsequently it became the largest business of its kind in Southeast Asia, growing by 20% per year on average. In September 2014 it was acquired by Diversified Communications, a global events company, delivering a 2.5x multiple of invested capital and a 100% IRR to Arowana. These returns were achieved without any financial engineering but reflected underlying operational improvements and growth minded management.

• The Australian thermal imaging service company, Thermoscan was acquired from its terminally ill founder. Under Arowana’s watch the business was transformed from a 30 year old paper-based business with operations only in Queensland into an efficient interactive data-driven technology literate nationwide business. In May 2019, Thermoscan was acquired by a strategic buyer, ARA Group. The sale delivered a 3.8x multiple on invested capital for Arowana and a 29% IRR. These returns were also achieved without  any financial leverage.

• In addition to the above, Arowana has built an asset management business, Arowana Funds Management.  The genesis was the Arowana Capital Australasian Micro-Cap PE Fund 1 (AMPEF 1) that was launched in July 2007 with the objective of providing succession capital to SME’s in Australia, New Zealand, and Southeast Asia. When the fund was fully realised in June 2013, investors had achieved an annualised gross IRR of 33% and a gross multiple of invested capital of 1.6x.  This fund was unique in that it was one of very few 2007 vintage funds globally that was able to successfully navigate the Global Financial Crisis (GFC) and deliver a highly profitable return to investors.

As of today, we continue to build, fix and scale up companies.  Here is an insight into some of our current enterprises:

• Global solar power company VivoPower International PLC was started by Arowana in August 2014 with an initial focus on Australia and Southeast Asia. The rationale for the establishment of a solar business was that we assessed that the cost of solar power was reaching grid parity and solar would become a strong growth sector globally. We also wanted to build a business that would help strategically transform a power and electrical services business called Aevitas that was in the Arowana portfolio (albeit held in a fund) and was facing a declining growth outlook. A leadership team was assembled and an Arowana team was mobilised to work alongside in scaling up this business. Within a year, it became evident that we were a bit too early in Australia and South East Asia; we decided to pivot to the US and other global markets, building a team that was headquartered out of London.  In less than 3 years, VivoPower scaled up to become a profitable global company generating US$18.9m of EBITDA profits, acquired Aevitas (which was one of its initial shareholders) and achieving a listing on NASDAQ in December 2016. It has since entered into a joint venture with ISS to develop a 1.8GW portfolio of solar projects in the United States, which is one of the largest in that market. However, Trump’s tariffs on solar panels has rendered the US market a less profitable one for solar development.  This coupled with leadership issues has seen VivoPower go from a global exponential growth story into a turnaround.  Arowana maintains a majority shareholding in VivoPower and its team are entrenched in the company to ensure a successful turnaround is ultimately achieved. This turnaround has been achieved for the Aevitas businesses in Australia, where in 3 years, its growth profile has transformed from a cyclical declining outlook to one where it is set to deliver 100% growth in the coming year, with further positive medium term growth on the horizon. This is a result of a major strategic and operational transformation programme and the promotion of growth minded leaders who embrace change.

• Asia Pacific vocational and professional education and training (VPET) company, EdventureCo Group, was established by Arowana in July 2016 with the acquisition of an Australian vocational education provider in the blue collar space. This was followed up with another acquisition in November 2016 as well as investment ahead of the curve in a leadership team that had turnaround as well as scale up growth experience.  In December 2017, Australia’s leading IT training company was acquired.  All of these  acquisitions were turnarounds requiring strategic and operational transformation.  Furthermore, this was a period of time when the vocational education sector was deeply out of favour with the investment community in Australia and New Zealand due to regulatory issues that had arisen resulting in a number of high profile vocational colleges collapsing.  This was a genuinely contrarian investment, where Arowana ultimately decided to go against popular consensus and leverage its track record and lessons learned from scaling up and exiting Intueri Education.  To date, the integration and turnaround programme has been completed ahead of schedule with better than expected results across student satisfaction levels, completion rates as well as profitability.  EdventureCo is now embarking on its next phase of growth into the fast growing South East Asian region. Courtesy of Arowana’s relationships in the region, the company has recently signed a landmark joint venture agreement in the Philippines with the Aboitiz group, one of the country’s longest established and leading conglomerates.  EdventureCo’s other key focus is to future proof itself as a company and as an education institution that facilitates upskilling and reskilling in the fourth industrial revolution.  Arowana’s operations and technology engineers are working with the EdventureCo leadership team in this regard.

• Off the back of the success of its inaugural fund, AMPEF 1, Arowana announced the establishment of the Arowana Funds Management division in July 2014. Two new funds were launched in the ensuing six months, being the Arowana Australasian Special Situations Fund 1 (AASSF1) and the Arowana Contrarian Value Fund (ACVF), (formerly known as the Arowana Australasian Value Opportunities Fund). Established in August 2014, the primary purpose of AASSF 1 was to formalise what the Arowana team had been doing on an opportunistic basis since November 2004 and provide private debt and hybrid financing to SME’s and growth companies in Australia. The fund is currently closed to new investments and is in harvest mode. The ACVF fund was formed off the back of an audited 5 year track record in public equities investing by Arowana’s founder for his own personal portfolio. ACVF was listed on the Australian Stock Exchange (ASX) as a LIC (listed investment company) in January 2015 and has grown funds under management by over 50% since then with a solid track record of performance to date (please refer to performance data on website). Arowana is also now raising its second private credit fund – the Australian Special Income Opportunities Fund (ASIOF) which will focus on direct lending to Australian companies and is open to wholesale investors only.