Venture capital strong amid downturn

Investors have continued to embrace the venture capital sector, figures from the latest Australian Bureau of Statistics survey (ABS) have revealed, despite the slowing of the global economy and cooling attitudes towards high risk investing.

The ABS Venture Capital report, put together with the Department of Industry, Tourism and Resouces and the National Office for the Information Economy, shows record growth during 2000 to 2001, with a 14 per cent increase to $5.7 billion in investor funds into the venture capital sector.

The report also registers a 38 per cent increase in funds drawn down from investors, to $3.7 billion, leaving $2 billion of committed funds still to be called on.

Manufacturing and transport activities received the highest interest from investors, with 35 per cent investment share as of June 2001. This was followed by the IT and media sector, including electronics and communication activities, with 29 per cent.

The number of venture capital funds also grew in the year to June 2001 by 24 per cent, resulting in 150 venture capital investment funds and companies who had invested in 806 innovative companies totalling $3.1 billion in net assets.

Funds registered with the Federal Government’s Pooled Development Fund Scheme also increased in the year to June 2001 by 31 per cent, mostly from small individual deals with new investments of less than $1 million.