How Did CD Private Equity Funds Achieve 2.22x TVPI Amid Currency Headwinds?

Overview of the CD Fund Series

The CD Private Equity Fund Series, managed by K2 Asset Management in partnership with Cordish Equity Partners, invests in small to medium-sized private US businesses. With a focus on growth buyouts and growth equity, the series targets companies with revenues between US$10 million and US$250 million. The funds leverage a 14-year track record of manager evaluation and operational expertise to generate value beyond financial engineering.

2025 Performance Highlights

The year 2025 saw a marked improvement in deal and exit activity, particularly in the second half, supported by more stable financing conditions and a narrowing valuation gap between buyers and sellers. The funds distributed a combined A$55.1 million to unitholders, reflecting strong realisation progress across the series. The platform-wide total value to paid-in capital (TVPI) stood at 2.22x, underscoring the funds’ ability to deliver returns above invested capital.

Each fund within the series reported solid metrics, Fund 1 achieved a total return on original invested capital of 2.37x, Fund 2 at 2.34x, Fund 3 at 2.39x, and Fund 4 at 1.77x. These returns were supported by multiple realisations with average multiples on invested capital (MOIC) ranging from 2.5x to over 3x in some cases.

Market Environment and Currency Impact

Despite these positive outcomes, the funds faced a translation headwind due to the Australian dollar strengthening by 7.8% against the US dollar over the year. This currency movement reduced reported returns by approximately 7%, a factor that unitholders should consider when assessing performance.

Managers remain disciplined in pricing and selective in exit timing, prioritising asset readiness and achievable pricing over speed. This approach reflects a maturing market where liquidity is managed organically rather than forced, with secondary market opportunities being explored cautiously.

Fund-Level Updates and Outlook

Fund 1 and Fund 2 have formally explored portfolio-level liquidity options, receiving multiple proposals but prioritising asset-by-asset realisations due to pricing and structural misalignments. Fund 2 notably completed a manager-led transaction in late 2025, accelerating liquidity and enabling a substantial capital return in early 2026.

Funds 3 and 4 continue to deploy capital across a broad portfolio of active companies, with early exits generating rollover equity and supporting ongoing growth. Realisations are expected to progress through 2026 to 2029, consistent with the funds’ self-liquidating design.

Strategic Positioning and Investor Communication

The Responsible Entity and investment managers emphasize ongoing communication with unitholders despite confidentiality constraints around underlying portfolio financials. Operating costs are under continuous review to ensure efficiency, with any changes to fund economics to be communicated transparently.

Looking ahead, the funds remain open to secondary market solutions that align with underlying asset values, while maintaining a disciplined approach to maximise unitholder outcomes. The gradual reopening of the low-volume market for CD4 around August 2026 is also anticipated to enhance liquidity options.