SYDNEY: The Australian private capital industry reached a record-breaking
$90 billion in assets under management (AUM) as at June 2021, an increase
of 11 per cent in the six months from 31 December 2020, according to the Preqin & Australian Investment Council Yearbook 2022 released today.
Private equity (PE) and venture capital (VC) which account for half of
private capital AUM saw high deal volumes in 2021. The aggregate value of
PE deals reached $20.1 billion, 20 per cent more than the previous peak of
$16.8 billion achieved in 2019. VC deals set an all-time record of $7.9
billion, doubling the previous year’s $3.9 billion.
“Private capital continued to find new investment opportunities despite the
disruption caused by border closures and the extended impact of the
COVID-19 pandemic,” said Australian Investment Council Interim CEO,
Jonathan Kelly.
PE and VC AUM grew at an average rate of 11 per cent per annum over the
five years to 30 June 2021, reaching $42.2 billion. Uncommitted capital
fell from $13.5 billion as at 30 June 2020 to $10.0 billion as at 30 June
2021, reflecting a significant deployment of capital by these segments into
Australian businesses.
Dave Lowery, SVP, Head of Research Insights at Preqin said: “Australia’s
sophisticated and mature private capital market remains attractive. With
returns of 17.8% (median net IRR) for Australia-focused funds with fund
vintages from 2012 to 2019, fund performance topped North America, Europe,
and Rest of World.
“Australia is increasingly seen as a desirable destination and hub for
institutional investment, with the active participation of both
international and local fund managers. We believe that private capital will
play a key role in the country's economic recovery, due to the sector
holding $26 billion in available funds for investment."
Private debt was the fastest-growing asset class in Australia with a 144%
increase in AUM from December 2020 to June 2021.
“Private debt managers are an increasingly important source of funds for
small to mid-sized Australian companies, as the commercial banks impose
tighter lending conditions in response to regulatory pressures.” Kelly
said.
“Businesses are also responding to the commercial approach and flexible
debt packages offered by the private debt segment, which increases the
capacity to invest in growth initiatives.”
The Preqin and Australian Investment Council 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
- $90 billion in AUM and $26 billion in uncommitted capital held by
Australian-focused private capital fund managers at June 2021.
- 17.8% median net IRR of Australian-focused private capital funds
(vintages 2012-2019).
- Australia-focused private equity and venture capital funds had a combined
$ 42.2 billion in assets under management ($30.0 billion PE and $12.2
billion VC) as at June 2021.
- $10.0 billion in total uncommitted capital held by Australian-focused PE
and VC funds at the end of September 2021 ($8.1 billion PE and $1.9 billion
VC).
- 267 VC deals were completed with a record $7.9 billion invested in 2021.
- $9.1 billion in aggregate capital raised by Australia-focused private
capital funds in Australia in 2021.
- Private Debt was the fastest growing asset class with a 144% increase in
AUM.
- Foreign investors have grown more active in Australia over the past two
decades from 18% of investors to 49% today.
- Australia now has 198 signatories to the United Nations’ Principles for
Responsible Investment, up from 173 in 2020.
Note: all currency units are in Australian dollars unless otherwise
stated.
Download yearbook
To arrange an interview with Jonathan Kelly, please contact:
Robyn Tolhurst
Public Affairs Manager
E: [email protected] | M: +61 436 388 919
To arrange an interview with Dave Lowery, please contact:
Christiana Wu
VP, Head of APAC Marketing
Preqin
E: [email protected] | DID: +65 6305 2232
About the 2022 Yearbook
The
Australian Private Capital Market Overview: Preqin & Australian
Investment Council Yearbook 2022
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,
analysis, and insights to the alternatives industry. The company has
pioneered rigorous methods of collecting private data for almost 20
years, enabling more than 170,000+ global professionals to streamline
how they raise capital, source deals and investments, understand
performance, and stay informed. Through close partnerships with its
clients, Preqin continuously builds innovative tools and mines new
intelligence, helping them to make better decisions every day.
Sign up to Preqin’s
Spotlight Newsletter
to receive direct weekly updates on the latest research, blogs,
publications, conferences, and product developments.