Private equity on the up in Oz
14 August 2013
By Asia Asset Management
The first quarter of 2013 saw continued strength in the Australian private equity and venture capital market, with the Cambridge Associates Australia Private Equity and Venture Capital Index (C A Australia Index) posting gains of 2.36%, according to the latest quarterly report released by The Australian Private Equity and Venture Capital Association (AVCAL) on August 13. Over the same period, the S&P/ASX 300 Index continued to rise on the back of growing confidence in the US economy and domestic interest rate cuts, increasing 8.04%.
The C A Australia Index over the medium to long term outperformed listed equities, posting annualised net-of-fees returns of 7.18%, 3.71% and 8.99% over the three, five and 15-year horizons respectively. However, ten-year returns showed listed market returns of 10.21% outpacing an 8.37% return by private equity.
One-year returns for the C A Australia Index were steady at 6.72% on an Australian dollar basis and 7.42% in US dollar terms. For ten of the last 11 years, annual rolling returns for the Index have been positive.
AVCAL CEO Katherine Woodthorpe said: “It is interesting to note that the first quarter of 2013 saw the highest level of distributions to limited partners in the last five quarters, and the second highest level since records began. Despite the challenging environment for exits, it is encouraging to note that private equity is generally delivering good returns to investors, particularly with realisations being top of mind for many limited partners at the moment."
Eugene Snyman, managing director at Cambridge Associates' office in Sydney, Australia, said: "Moving forward, it will be interesting to see how the continued strength of the equities markets will impact exits, perhaps leading to even greater returns for many private equity investors."
More News >