Untapped potential
A new Government report has suggested that the Australian private equity and venture capital industry has the potential for considerable growth, already being a leader in the Asia-Pacific and ranking 11th globally.
The report, “Private Equity and Venture Capital in Australia”, produced by Invest Australia this week, claims that many of the world’s leading international financial institutions are investors in Australian private equity funds and have been attracted by the nation’s stable political and legal environment and its fast growing and diversified economy.
The report also noted the attractiveness of the healthy initial private offer market, the expanding debt market, the high calibre of Australian fund managers, tax efficient investment vehicles and the quality and diversity of investment opportunities.
It said that at the end of 2006, the Australian private equity and venture capital industry included 139 firms managing $17 billion in capital, with the majority of capital under management being in the buyout sector.
Looking at Australian venture capital managers, the report said that of the $4.3 billion invested in 902 companies as at June 30, last year, nearly $100 million was invested in seed stage businesses, $400 million in start-up companies and $1.2 billion in companies at the early expansion stage of their development.
It said 49 per cent of all companies with venture capital or private equity backing were between two and four years old.
AUTHOR
Mike Taylor
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