Total Australian private equity and venture capital fundraising for financial year 2015 reached the second highest level in eight years, according to a private equity and venture capital report.
Australian Private Equity and Venture Capital Association (AVCAL) and Ernst & Young’s (EY) fundraising, investments and exits annual yearbook, found the majority of new commitments came from overseas investors, with sovereign wealth funds now contributing 26 per cent of total new fundraising — more than superannuation funds and other investor types.
The report found overall investment activity was higher in terms of the number of companies invested in and the dollar amount invested, rising by 5 per cent and 32 per cent respectively when compared to FY2014.
Private equity investment by dollar value in FY2015 was 54 per cent higher compared to the previous year, off the back of invested investment from both domestic and offshore fund managers.
Venture capital investment was lower in dollar terms compared to FY2014, but was in-line with expectations. The report noted that total venture capital investment in FY2015 was still higher than FY2012 and FY2013.
AVCAL chief executive, Yasser El-Ansary said “the higher levels of fundraising and investment are very encouraging to see”.
“They underpin the efforts of fund managers to deliver significant value for the businesses they invest into, while also generating exceptionally strong returns for investors,” he said.
EY’s head of private equity in Oceania, Bryan Zekulich believes that historically high levels of ‘dry powder’ and strong global interest will continue to support increased investment activity in the Australian private equity and venture capital markets.
“Private equity managers in Australia have been successful in finding and building businesses, and recent exits demonstrate the longer term investments made by private equity are a productive and sustainable model,” he said.
