Australian venture capital and later-stage private equity funds had a total of $5.95 billion available to spend on new businesses as of June 2013, as funds struggled to raise new capital after a particularly strong 2011-12.
Data released by the ABS today showed a total pool of 19.8 billion in venture capital and later-stage private equity funds, up 2.5 per cent from the previous year.
Of that sum, $13.8 billion had been invested into start-ups or other high-risk businesses, leaving a total of $5.95 billion in uncommitted capital – down 4 per cent from the previous year.
From the ABS report:
The ABS reported that new investor interest in the high-risk, high-reward funds fell a record 77 per cent ($2.4 billion) in 2012-13 after particularly strong growth in committed capital the year prior.
The reported fall was the “largest decrease we have seen” since the data series began in 2004-05, according to the ABS’ assistant director of R&D surveys, Tracey Rowley, who said:
It appears Australian funds found it difficult to attract further capital from investors on the back of a peak capital raising period last financial year.
Despite difficult fundraising conditions, existing investments performed strongly during the 2012-13 financial year.
Ongoing investments are revalued each year, and this year resulted in an increase of $906 million, which is the highest figure in over 10 years.
The ratio of local to foreign investors also fell slightly last financial year, with domestic investors accounting for 78 per cent of the total $19.8 billion committed, down from 80 per cent the previous year.
Local superannuation funds contributed $9.58 billion – almost half of the 2013 capital commitments.
The ABS reported that funds assessed 6,604 potential new investments throughout the year and “conducted further analysis” on 850 of those, from which they chose to pour a total of $919 million in 76 investees. That means just over 1 per cent of businesses that sought funding got it.
Funds also put an extra $203 million into 157 existing investments throughout the year, while making a total of $1.25 billion worth of exits through trade sales, IPOs and buybacks – down 27 per cent on the year prior.