Australian mid-market private equity firm Next Capital has raised A$375 million ($255.5 million) for its fifth fund and is reportedly locking a second investment for the vehicle.

The fund, which was closed last week, exceeded the initial target of A$350 million, the Australian Financial Review (AFR) reported. Next Capital confirmed the fundraising on its LinkedIn profile.

Domestic investors were said to account for more than half of commitments to Next Capital Fund V, while the vehicle also attracted half a dozen new limited partners.

Existing investors such as Roc Partners, and superannuation funds CBUS and MLC Wealth returned to back Fund V, AFR said.

The report added that ASX-listed short-term rental operator Alloggio Group will be Fund V’s second investment through a scheme of arrangement.

AFR reported that Next Capital’s last fund delivered more than 30% IRR. The firm says on its website that it expects to generate returns of 25% per annum from its funds.

Next Capital closed its first A$265-million fund in 2005. The firm subsequently raised a total of A$851 million for Fund II to Fund IV.

Next Capital was founded in 2005 by John White, Patrick Elliott and Sandy Lockhart who spun it out from Macquarie Bank.

The firm is sector agnostic and focussed on growth opportunities primarily in Australia and New Zealand. It invests in small to mid-market buyouts of businesses with an enterprise value of between A$50 million and A$200 million.

“This segment of the market has been our core focus for over 20 years but is often neglected by our private equity peers in robust market conditions. We also believe that smaller companies are able to grow more rapidly than their larger counterparts,” Next Capital says on its website.

The firm’s portfolio includes car rental company Jucy Rentals, equipment rental business Silverchef, contractor Eptech Group and remediation company Enviropacific Services.