Building Global Reach

CHAMP PRIVATE EQUITY

CHAMP Private Equity, the successor to Australia's pioneer private equity investment firm, was co-founded by Castle Harlan in 1999. CHAMP, based in Sydney, Australia, invests in the Australasian region - primarily Australia - and currently manages with Castle Harlan, approximately A$1.5 billion in private-equity investments in its CHAMP I and CHAMP II funds. Limited partners in the CHAMP funds include institutional and individual investors from throughout the world. One of CHAMP's most successful investments was Austar United Communications Limited, Australia's largest regional pay-TV company.

BUILDING GLOBAL REACH

CHAMP Private Equity is a highly successful partnership between Castle Harlan and one of Australia's premier private equity firms - two enterprises with similar values and investment strategies and a common desire to extend their reach.

In the late 1990s, Castle Harlan, looking for new partners, investors and investment opportunities, chose Australia and the firm of Australian Mezzanine Investments Ltd. after evaluating many possibilities. CHAMP - Castle Harlan Australian Mezzanine Partners - was established in 1999 to invest in the Australasian region.

The A$500 million CHAMP I Funds, which closed in June 2000, have invested in nine Australian companies. By the end of 2005, the CHAMP funds had achieved compounded realized returns of more than 60 percent annually. A team of 12 investment professionals manages CHAMP in Sydney with support from the CHI team in New York.

Howard D. Morgan, Leonard M. Harlan and Benjamin S. Sebel

Now called CHAMP Private Equity, the firm focused principally on investing in companies with enterprise values over A$100 million. It also created an affiliate, CHAMP Ventures, with seven investment professionals, to manage a A$165 million fund providing expansion capital for smaller businesses.

The CHAMP II funds, which closed in July 2005, have committed capital of A$950 million. About a third of the limited partners of the CHAMP II funds are Australian institutions, about 40 percent from the U.S. and the remainder from Europe and Asia.

Besides its ownership interest in CHAMP, Castle Harlan has also committed capital from its limited partnerships to the CHAMP funds, and has invested directly in CHAMP portfolio companies, putting its own capital and contacts to work for CHAMP.

The 2003 acquisition of Austar, Australia's largest satellite-based pay television operator, is an example of the teamwork between CHAMP and Castle Harlan. Publicly traded Austar was a distressed company, with A$500 million in defaulted high yield bonds and a plummeting stock price. The CHAMP I Funds and Castle Harlan Partners IV together with Austar's management acquired Austar's bonds for a fraction of face value, gained control of the company and successfully turned the company around. Then in late 2005, the CHAMP I funds and CHPIV sold their stakes in Austar, earning a return of more than seven times their initial investments in a period of 34 months.