The value of Australian private equity deals in 2016 fell to 36 per cent below its five-year average, according to new data from Bain & Company.
Deal value in 2016 came in at $5 billion dollars in Australia, only half of the $10 billion recorded in 2015, the company found.
“Australia is ripe with plenty of PE capital available, as well as secondary opportunities, but the availability of large quality targets is dwindling, contributing to a subdued market,” Bain & Company said.
“The country is also fending off China-led competition and high prices.”
Deal value also declined across the broader Asia-Pacific region as a whole, the company said, down from $124 billion in 2015 to 2016’s $94 billion, with the number of deals also falling to 892 “after peaking at more than 1,000 the year prior”.
Bain & Company did, however, note that the performance of the private equity market differed greatly by country, with both China and Japan showing strength.
“Private equity firms in Greater China have a large pool of companies in which to invest, and this region remains the primary market in the Asia-Pacific private equity landscape. Investments reached $49 billion in 2016, down compared to last year but still 30 per cent above its five-year average,” the company said.
“Supported by its largest ever PE deal, Japan had its best year since 2007 with $10 billion in private equity investment value, up 53 per cent from its historical average.”
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