As the proportion of high-net-worth individuals in Australia continues to outpace the global average, family offices now comprise the majority of active private capital investors, according to the 2025 edition of the Australian Private Capital Yearbook, released on Thursday by the Australian Investment Council (AIC) and Preqin.
Family offices accounted for 40 per cent of active private capital investors in 2024, up from 25 per cent in 2022 and just 10 per cent in 2020. Over the same period, the share held by superannuation funds fell from 48 per cent in 2020 to 29 per cent in 2022, and just 13 per cent as of December 2024.
“This decline may be the result of consolidation,” the report said.
While the number of APRA-regulated funds has declined sharply since 2018, the report noted that super funds remain significant allocators to private capital.
As of 30 December, APRA-regulated super funds held $2.9 trillion in assets under management, with around $500 billion invested in unlisted assets, including property, infrastructure, credit and equity as of 30 June.
“Unlike other managed investment schemes, superannuation funds have no formal limit on how much they can allocate to unlisted assets, although some funds have come under scrutiny over valuation processes,” the report said, suggesting that such scrutiny may be contributing to reduced exposure to private credit.
The report also pointed to the role of ASIC and the Your Future, Your Super annual performance test in shaping asset allocation trends.
In a separate report published on Thursday, Moody’s Ratings flagged a growing shift by alternative asset managers towards products tailored to retail investors, amid a slowdown in institutional fundraising.
Moody’s noted a rise in evergreen fund launches, which appeal to both retail and institutional investors, the latter often needing to rebalance private market exposure in line with strategic asset allocation following periods of volatility in public markets.
“The growing adoption and diversity of these funds and structures will help individual investors and the private wealth channel to better tailor what they want to invest in,” the financial services firm said.
Aussie private capital funds outperform global peers
The Australian Private Capital Yearbook also revealed that despite turbulent global conditions, which saw fundraising sink to its lowest level in a decade, Australian private capital funds outperformed international peers on key return and fundraising metrics.
Namely, the data showed that Australia-focused private capital funds delivered stronger median net IRRs (13.8 per cent) than those targeting North America (12.4 per cent), Europe (12.0 per cent), and other regions (9.8 per cent) while maintaining one of the lowest global risk profiles.
As of September 2024, AUM held steady at $139 billion, with private equity, venture capital and private credit making up $65 billion; VC alone grew 7 per cent to $17 billion in the nine months to September.
Commenting on the report’s overall findings, Preqin global head of research insights Cameron Joyce said: “Preqin’s analysis shows Australia’s private capital investor base is evolving and reflects growing demand from non-institutional investors.
“There has been a proliferation of new products to accommodate this demand, including open-ended structures. Amid significant volatility in public markets in 2025, investors continue to look to private capital as an effective way to gain exposure to long-term investment trends.”
