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Australia’s private capital market assets hit record A$30 billion

By Asia Asset Management  
June 10, 2019

Australia’s private capital industry’s assets hit an all-time high of A$30 billion (US$21 billion) in the first half of 2018 as more businesses opted to raise funds from private investors, according to data provider Preqin.

The record total assets under management as of June 2018 was an increase of almost 17% from A$25.7 billion at the end of 2017.

Private equity and venture capital managers raised a combined A$6.6 billion in all of 2018, almost double the A$3.4 billion raised in 2017, driving their cash reserves or dry powder up 31% to A$11 billion, Preqin says in a statement on June 5.

According to Yasser El-Ansary, chief executive of the Australian Investment Council, more businesses are choosing to raise funds from private capital investors rather than via public markets.

“Private capital investors can help unlock the growth and expansion opportunities of businesses, in a way that public markets simply cannot,” Mr. El-Ansary says in the statement.

Buyout funds, which have dominated fundraising in Australia for the last six years, accounted for around 79% of total capital raised in 2018.

Preqin says buyout funds have raised almost twice as much capital as the rest of Australia’s private equity industry since 2012.

There were 75 private equity-backed deals and 160 venture capital-backed transactions in the country last year, up 89% and 77%, respectively, from 2017.

Preqin’s Chief Executive Mark O’Hare says Australia’s private equity market is growing from “strength to strength” and that the country’s growing economy is providing many investment opportunities.

“Australia is an increasingly important and attractive part of the global private equity and venture capital industry in several respects: as a source of funding for Australian businesses, and as an attractive opportunity for global investors. We can expect to see it continue to flourish in the coming months and years,” Mr. O’Hare says in the statement.