Australian Bureau of Statistics
5678.0 - Venture Capital and Later Stage Private Equity, Australia, 2005-06
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 16/02/2007
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ANALYSIS OF RESULTS
DRAWDOWN FROM INVESTORS BY INVESTOR TYPE, Percentage of total investment in VC&LSPE vehicles, JUNE 2006
VC&LSPE MANAGERS AND INVESTMENT VEHICLES
The VC&LSPE manager is generally a skilled business person and financial analyst. The gathering of commitments from investors takes a considerable amount of time, as does the process of evaluating potential investees. The survey identified 157 active VC&LSPE managers who were managing 229 VC&LSPE investment vehicles. This compares with 140 active managers managing 210 vehicles in 2004-05.
The value of total assets held by VC&LSPE investment vehicles was widely dispersed, from 118 investment vehicles having less than $10m in assets, to 18 with more than $80m in total assets (see the preceding graph).
Investment vehicles had total expenditure of $306m during 2005-06, just under half of which was for management fees ($143m, compared to $123m during 2004-05). Total income increased to $283m, with the increase driven mainly by a large increase in interest receipts ($134m in 2005-06 compared to $88m in 2004-05).
VC&LSPE funds used various valuation methods (refer to paragraph 14 of the Explanatory Notes). The AVCAL method was most frequently used, with 127 vehicles using this method in 2005-06, followed by book value/cost valuation methods (35) and directors' valuation (34).
Of the $4,316m that had been invested in the 902 investee companies (deals) at June 2006, $1,053m was invested in new projects during the 2005-06 financial year (up by $214m or 26% on 2004-05), with additional investments in existing projects of $347m (up $164m or 90%). See table 2 for more details.
The preceding graph indicates that in 2005-06, the majority of deals made by VC&LSPE vehicles were with investee companies established for between two and four years (49%), which is in similar proportions to that recorded in previous years. Investee companies in the five to 10 year category accounted for 31% of deals in 2005-06.
See paragraph 12 of the Explanatory Notes for a definition of the VC&LSPE stages referred to in the above graph.
VC&LSPE arrangements typically do not involve a level of controlling equity by a single VC&LSPE vehicle in investee companies, with most deals having less than 40% ownership by any one investment vehicle, as the above graph illustrates. However, it is worth noting that more than one fund manager may invest in the same investee company or a fund manager may manage more than one vehicle investing in an investee company.
The above graph shows the distribution of the value of investment placed by VC&LSPE managers in individual investee companies. Most deals attracted less than $10m from any one investment vehicle, but the proportion receiving greater than $20m has been steadily increasing over the past three survey years. The number of investees receiving less than $1m in 2005-06 decreased to around the level recorded for 2002-03.
The above graph indicates that most of the value of VC&LSPE investment in investee companies continued to be invested in investee companies with head offices in NSW and Victoria (with 29% and 22% respectively at June 2006). The current value of investee companies with head offices in NSW increased by $60m compared to 2004-05, while Victoria fell (down $44m) for the third consecutive year. The current value of investments by Australian vehicles in investee companies domiciled overseas remained significant, increasing (up $257m) to $658m in 2005-06.
VC&LSPE vehicles invested in a wide range of industries. Of the total value of $4,316m invested in 2005-06, Manufacturing and Utilities continued to be the predominant industry of investment, with investments at the end of the year of $1,039m (24% of the total). The current value of investments expressed as a proportion of total investments increased in the Finance and Property industries (up $274m to 18% of total investments), and Agriculture and Mining industries (up $354m to 16% of total investments). All other industries recorded decreases in their percentage of total investment.
When analysed by activity, as defined by the Standard and Poors Activity Classification, the Manufacturing and Transport related activities attracted the largest share of investment, with $1,579m or 37% of total investment for 2005-06. Retail, Services and Real Estate with $1,266m (29%) and IT, Media, Electronics and Communications with $681m (16%) also attracted large shares of the total investments as at the end of June 2006.
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This page last updated 13 February 2008