CD2 Nets 2.54x MOIC and 17.6% IRR on US$12.7M Sale
CD Private Equity Fund II has completed a full exit from a key underlying investment, generating robust returns and preparing to distribute proceeds to unitholders in early 2026.
- Full realisation of underlying investment via U.S. Select Private Opportunities Fund II
- Sale completed at 84.8% of Q3 2025 net asset value
- Gross cash proceeds of approximately US$12.7 million
- Net multiple on invested capital of 2.54x and net IRR of 17.6%
- Distribution to unitholders expected in Q1 2026
Portfolio Realisation Accelerates
CD Private Equity Fund II (ASX, CD2) has announced a significant milestone with the full realisation of an underlying investment through its majority stake in U.S. Select Private Opportunities Fund II, LP (LP2). The sale, completed at 84.8% of the underlying fund’s net asset value as of the third quarter of 2025, marks an accelerated exit of four portfolio companies that were initially expected to realise over the next one to two years.
Strong Financial Outcomes
The transaction generated gross cash proceeds of approximately US$12.7 million for LP2, with no deferred settlement terms, underscoring the liquidity and certainty of the deal. Impressively, this investment delivered a net multiple on invested capital (MOIC) of 2.54 times and a net internal rate of return (IRR) of 17.6%. These figures reflect both strong underlying asset performance and a favourable exit environment, highlighting the fund’s ability to capitalise on market opportunities.
Implications for Unitholders
Following receipt of the distribution from LP2, the responsible entity, K2 Asset Management Ltd, expects to pass on proceeds to CD2 unitholders as soon as practicable in the first quarter of 2026. This aligns with the fund’s established six-monthly distribution review process, offering investors a timely return on their capital. The announcement signals a positive liquidity event for the fund, which has historically balanced long-term private equity exposure with periodic distributions.
Looking Ahead
While this realisation represents a key step in portfolio management, K2 Asset Management has indicated it will continue to explore additional liquidity opportunities across the remaining investments. The focus remains on maximising value for limited partners, suggesting a proactive approach to managing the fund’s portfolio in a dynamic market environment. Investors will be watching closely for further updates on potential exits and distributions as the year unfolds.
Bottom Line?
CD2’s swift exit and strong returns set the stage for renewed investor confidence and upcoming distributions.
Questions in the middle?
- What are the prospects and timing for liquidity events in the remaining portfolio?
- How will the realised gains impact CD2’s net asset value and future distributions?
- Could market conditions affect the pace of further portfolio realisations?
