AVCAL reveals standstill in buyout fundraising ahead of new taxes
As Australia awaits the announcement of new tax regulations on private equity profits, the Australian Private Equity & Venture Capital Association (AVCAL) has released a study delineating how uncertainty over the new laws has already affected the market’s PE sector, specifically highlighting that buyout funds have struggled to find backers, hindering the industry’s recovery process.
According to AVCAL, buyout funds, which were raising in excess of A$5 billion ($4.9 billion) before 2009, have now raised an average of A$1.46 billion ($1.4 billion) in the first half of 2010, or just 3% more than the previous year. "PE fundraising picked up a little at the beginning of FY2010 with the improving market conditions at that time," AVCAL noted. "However, Limited Partners continued to take a cautious approach to new commitments and this, combined with heightened uncertainty over the tax treatment of PE proceeds, saw fundraising activity slowing markedly in the subsequent quarters."
The report noted that overall PE investment increased by 14% to A$2.18 billion ($2.16 billion) in that time, while venture capital investment declined by 7% year-on-year to A$187 million ($185.6 million).
The regulations, imposed by the Australian Taxation Office (ATO), comes a year after the office began an investigation into TPG Capital over $625 million of unpaid taxes and avoidance penalties following the firm's IPO exit of its Myer department store chain. ATO was initially slated to announce the regulatory amendments in May, yet the process was delayed to, among other reasons, further analyze their implications on international business processes.
Further reading
More on Buyout
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.