Private equity proving resilient
The Australian Private Equity (PE) and Venture Capital (VC) industry is demonstrating resilience despite tough global economic conditions in the financial year and ongoing economic uncertainty forecast for debt and capital markets, according to the Australian Private Equity and Venture Capital Association (AVCAL).
AVCAL says promising signs are beginning to emerge of a strong rebound in the domestic Initial Public Offering (IPO) market early in the new financial year, indicating conditions are set to improve — despite slightly lower deal-making and exit activity that punctuated FY2013.
Its report said PE-backed IPOs and sales of equity following market listing rose to their highest levels in the last five years. The re-opening of the domestic IPO market was a positive sign for upcoming exits, the report said, as many firms were now starting to look at the potential for further PE and VC-backed IPOs during FY2014.
Exit activity remained relatively steady, with 64 companies exiting (68 the previous year). AVCAL's analysis reveals that trade sales were still the preferred method of divestment, accounting for 41 per cent of companies exited.
According to AVCAL CEO Yasser El-Ansary, there has been similar pick-up in PE activity in overseas markets such as the US and Europe since the start of 2013. He said consolidation of the momentum that has been building more recently in the Australian market would be encouraged by stable policy and regulatory settings.
The softer domestic M&A market in FY2013 was reflected in fewer PE and VC deals completed during the year. Total investments fell slightly by 8 per cent to $2.76 billion, with the number of deals dropping to 197 from 224 in the previous year.
Recommended for you
Fund managers may be operating in a squeezed environment, but a salary guide shows they are willing to pay up for specialist talent to diversify their fund range.
Reach Alternative Investments has entered into a strategic partnership with Russell Investments to bolster its wholesale private markets offering for financial advisers and investors.
Boutique investment consulting and research house Genium Investment Partners has announced a senior appointment to drive further growth in its research ratings business.
Nuveen has appointed a global head of estate, a successor to Chris McGibbon who steps down after almost 25 years.
