The AVCAL/Ernst & Young 2013 Yearbook, released yesterday, found that private equity (PE) funds raised $711 million for 2012/2013, a “sharp decrease” from the $3,031 million raised in the previous year.
Venture capital (VC) funds raised $155 million via three funds in 2012/2013, which was down on the previous year but on a par with 2009/2010 and 2010/2011, according to the report.
Investments in the sector were down eight per cent on the previous year at $2,760 million.
“The overall softening of M&A activity in Australia was similarly reflected in PE and VC deal flow, with the number of investments falling to 197 from 224 the previous year,” the report said.
Breaking total investments for the year into categories, PE investments were down seven per cent to $2,649 million and VC investments fell by 20 per cent to $111 million.
Sixty-four companies were exited by PE and VC funds in 2012/2013, with trade sales remaining the exit strategy of choice at 41 per cent of divestments.
The increasing number of divestments via initial public offerings was a positive for the industry, said the report.
“The positive outlook for the industry will be bolstered by a more stable policy environment and a recovery in business confidence,” AVCAL chief executive Yasser El-Ansary said.
“Ensuring we have the right business policy and regulatory settings will go some way to building momentum in the marketplace, which will ultimately lead to more business investment and more deal activity,” he added.
Total funds under management for Australian PE and VC funds comprised $23.7 billion as at 30 June 2013.
