Surfeit of money curbs private equity investment

private-equity/superannuation-funds/financial-markets/

1 November 2006
| By Mike Taylor |

Exploratory research conducted by CPA Australia has revealed why superannuation funds are reluctant to invest in private equity.

According to the research, the major deterrent to investing in private equity is the level of competition between private equity funds for quality deals in the market.

The research, conducted for CPA Australia by lecturer in finance at the University of Western Sydney, Sacha Vidler, and the Australian Consumers’ Association senior policy officer, financial markets, Nick Coates, said there was often a concern that the private equity space could be a victim of its own success and that there could often be too much money chasing too few deals.

It said other deterrents included the low level of liquidity and the long maturity of private equity investments, with superannuation funds being put off by having to leave money in private equity for seven to 10 years.

Commenting on the survey findings, CPA Australia technical adviser, business management, David Fox said by understanding why superannuation funds chose not to invest in private equity companies moved closer to overcoming the barriers to such investments.

“This research will help equity groups understand how superannuation funds make their investment decisions and help them reassure superannuation funds of the good returns that private equity can bring,” he said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months 3 weeks ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months 4 weeks ago

ASIC has suspended the Australian Financial Services Licence of a Melbourne-based financial advice firm....

1 week 4 days ago

The corporate regulator has issued infringement notices to three AFSLs whose financial advisers provided personal advice to a retail client while unregistered....

2 weeks 3 days ago

ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test....

3 weeks 1 day ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND