Australia's fundraising rebounds with foreign investor support

According to the Australian Private Equity and Venture Capital Association (AVCAL)/Ernst & Young 2012 Yearbook, the amount raised constitutes a 59% increase on the previous year's figure. Commitments from overseas investors represented more than half the total amount raised, in line with the trend during recent years.

"Overseas investors have continued to take advantage of Australia's domestic VC and PE expertise, its strong economy coupled with its financial stability and the rule of law," commented AVCAL CEO Katherine Woodthorpe. "Despite challenging market conditions, deal activity in the venture, small- and mid-market segments that make up the majority of VC and PE investments in Australia has remained relatively resilient."

Within the VC sector, most of the funds raised were directed to a small number of vehicles. Nearly all of these commitments were sourced from government-backed or overseas LPs.

It should not be overlooked that A$1.5 billion of the A$3.3 billion total came from Archer Capital Fund V, which closed at the end of 2011 with two-thirds of its commitments hailing from overseas.

When Archer - then known as GS Private Equity - raised its first two funds more than a decade ago, though, every single LP was Australian. Funds III and IV came along in 2004 and 2007 respectively, and at that stage 15% and 55% of investors hailed from abroad.

The changing composition of Archer's LP base might be seen as a proxy for the Australian private equity industry as a whole. Tough fundraising conditions over the past four years have caused even the best-of-breed fund managers to look offshore to raise capital.

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• Topics
• Australasia
• Fundraising
• LPs
• Fundraising
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• Australia