SYDNEY: The Australian private capital industry reached a record-breaking
$77 billion in assets under management (AUM) as of June 2020 during the
peak of COVID-19 pandemic uncertainty according to the latest
Preqin & Australian Investment Council Yearbook 2021
released today.
“This latest data from Preqin confirms what can all see happening before
our eyes right now – private investment capital is growing at a rapid pace
and investors all over the world want to be a part of the massive value
creation wave that is taking place in unlisted markets,” said Australian
Investment Council Chief Executive, Yasser El-Ansary.
The analysis contained in the Yearbook shows that the industry saw a very
significant 148% lift in assets held by private funds focused on the
Australian market over the past decade. In fact, the six months following
December 2019 alone saw an 8.4% increase in Australia-focused private
capital assets across the private equity, venture, private debt, and
unlisted real estate, agriculture and infrastructure sectors.
Private equity (PE) and venture capital (VC) registered four years of
consecutive growth for the first time in the past decade with $37 billion
in combined AUM, with more than $13.5 billion in uncommitted capital ready
to deploy.
Venture capital in particular witnessed a substantial boost in asset flows
with a record $1.3 billion in fresh capital raised last year – a sum almost
double the total secured in 2019 ($735 million).
“This is strong evidence that Australia’s private capital industry is
consolidating its position as a driver of Australia’s innovation economy
through investment into businesses which are at the leading edge of
technology and new economic and jobs growth.
“One of the biggest themes coming out of the pandemic has been the push
towards greater digitisation and investment in technology, and the depth of
capital available to be deployed into businesses to accelerate that
transition is growing every day,” said Australian Investment Council Chief
Executive, Yasser El-Ansary.
Fundraising for PE was strong during 2020 with $4.3 billion in aggregate
capital raised, almost 2.8 times the capital secured in 2019 ($1.6
billion). While there were fewer PE deals in 2020 compared to the previous
year, aggregate deal value amounted to $14.8 billion. This was supported by
sizeable deal activity in the ‘consumer discretionary’ sector which
comprised 39% of PE-backed deals in Australia by value, while ‘raw
materials and natural resources’ comprised 16% and ‘financial and insurance
services’ transactions, 15%.
“In the year ahead, we will see a significant lift in deal activity by
private capital investors who will be able to play a lead role in helping
to stabilise businesses disrupted by the pandemic, and to invest into
sectors that need to go through phases of structural transformation to
become stronger and more sustainable in the short and long-term,” Mr
El-Ansary said.
“Mark O’Hare, founder and CEO at Preqin, said: “The Australian private
capital market has experienced record growth, boosted by a stable economic
and political backdrop and attractive risk/return profiles. Preqin’s
insights show that there is abundant demand from both domestic and
international players — the industry’s adaptability and resilience,
combined with Australia’s lead in sustainable investment practices, will
ensure the future remains bright for the Australian private capital
market.”
The Yearbook uses figures compiled by leading international
alternative assets data provider Preqin, and looks at fundraising,
investments and exits across the Australian private capital industry.
Key highlights
- $27 billion in uncommitted capital held by Australian-focused private
capital fund managers at June 2020.
- $13.5 billion in total uncommitted capital held by Australian-focused PE
and VC funds at the end of June 2020 ($11 billion PE and $2 billion VC).
- Australia-focused private equity and venture capital funds had a combined
$37 billion in assets under management ($26.6 billion PE and $10.6 billion
VC) as at June 2020
- 169% increase in aggregate capital raised by Australia-focused PE funds
in 2020 compared to 2019.
- The aggregate capital raised by Australia-focused private capital funds
in Australia in 2020 was $8.3 billion.
- $2.4 billion was transacted in venture capital deals in Australia last
year, the second highest total in the last decade.
- $224 million average size of private capital funds closed in 2020.
- 50% of Australian private debt-backed deals in 2020 focused on senior
debt.
- 13.3% median net IRR of Australian-focused private capital funds(vintages
2011-2018).
Note: all currency units are in Australian dollars unless otherwise
stated.
-ENDS-
To arrange an interview with Yasser El-Ansary, please contact:
Robyn Tolhurst
Public Affairs Manager
Australian Investment Council
E: [email protected] T: +61 2 8243 7000 M: +61 436 388 919
To arrange an interview with Mark O’Hare, please contact:
Christiana Wu
VP, Head of APAC Marketing
Preqin
E: [email protected] DID: +65 6305 2232
About the 2021 Yearbook
The
Australian Private Capital Market Overview: Preqin & Australian
Investment Council Yearbook 2021
tracks activity in the Australian private capital industry. It is based
on data contained in the Preqin Pro data platform, as well as
on-the-ground information collected by both Preqin and the Australian
Investment Council. Report content has been co-authored by the
Australian Investment Council and Preqin.
About the Australian Investment Council:
The Australian Investment Council is the voice of private capital
in Australia. Private capital investment has played a central role
in the growth and expansion of thousands of businesses, which when
combined represents a multi-billion dollar contribution to the
Australian economy. Our members are the standard-bearers of
professional investment and include: private equity, venture
capital and private credit funds, alongside institutional investors
such as superannuation and sovereign wealth funds, as well as
leading financial, legal and operational advisers.
The Australian Investment Council requests its name always
appear in full and not abbreviated or as an acronym.
About Preqin:
Preqin is the Home of Alternatives®, the foremost provider of
data, analytics and insights to the alternative assets community. From
pioneering rigorous methods of data collection to developing a
revolutionary platform, we have committed ourselves to furthering the
understanding of alternatives for over 20 years. Through close partnership
with our clients, we continuously build innovative tools and mine new
intelligence to enable them to make the best decisions every day.
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