Australian businesses don't trust PE – PwC survey

The problem appears to be one of perception rather than lack of awareness. Just over two thirds of the 1,000 businesses interviewed said they had some or good knowledge of private equity, although only one in 10 gained this information through first-hand experience. The majority relied on friends, colleagues and the media.

"The results reinforce what we see consistently - understanding of private equity among private businesses is low and misconceptions are high," said Alan Elliott, a private clients partner at PwC Australia. "We would encourage business owners to keep an open mind and further explore the suitability of private equity if they are serious about creating value and growth."

One of the foremost concerns about private equity - cited by four in 10 businesses - was a perceived loss of control. This may in part be a result of the media's tendency to focus on big buyouts. Control deals account for more than three-quarters of the $4.3 billion in private equity investments since the start of 2011, according to AVCJ Research. However, of the 31 recorded transactions, only nine were buyouts. Growth capital, with 11, had the largest share.

Katherine Woodthorpe, CEO of the Australian Private Equity and Venture Capital Association (AVCAL), added that PE firms' investment goals are normally aligned with management teams' objectives. "Private equity funds that invest in this space are looking for companies that need a capital injection, as well as the expertise and networks that PE firms bring to assist their portfolio companies to fulfill their growth potential," she said.

PwC spoke to 1,000 businesses with an annual turnover of $10 to $100 million for the survey. Just over one third said they would be seeking funding for investment in the next 12 months.

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• Topics
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• AVCAL