5678.0 - Venture Capital and Later Stage Private Equity, Australia, 2018-19 Quality Declaration 
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 27/02/2020   
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Introduction

Venture Capital and Later Stage Private Equity (VC&LSPE) is short to medium term, high risk capital investment in companies. Investment is generally in new, innovative or fast growing companies.

Fund managers set up a vehicle with investors attracted to raise capital which is drawn down over time. Once the vehicle has capital, the fund manager enters into deals with investee companies and provides expertise to assist the company develop its full potential. The intended return on investment is mainly in the form of capital gains which investors and fund managers receive once the stake in the company has been exited.


Comments by investors

The value of Commitments is the capital pledged by investors. This represents the maximum amount that the Venture Capital and Later Stage Private Equity (VC&LSPE) vehicle may draw down from investors.

As at 30 June 2019:

  • Commitments decreased to $26,738m (down by 1% from 30 June 2018).
  • The proportional share of Non-resident versus Resident investor contributions continued to increase.

Commitments by source of capital as a percentage of total Commitments


Value of investment

Value of investment is the balance sheet value of deals entered into with investee companies.

Since 30 June 2018 the Value of investment:
  • Increased 11% from $11,001m to $12,162m.
  • Remained at 0.6% as a proportion of Australia's Gross Domestic Product (GDP).

VC&LSPE VEHICLES, BY VALUE OF INVESTMENT AND PROPORTION OF GROSS DOMESTIC PRODUCT, 2016-17 to 2018-19

2016-17
2017-18
2018-19

Value of investment $m
10 575
11 001
12 162
Gross Domestic Product (GDP) (a) %
0.60
0.60
0.62

(a) In calculating VC&LSPE ratios, the most recently published annual GDP values were sourced from the Time Series Spreadsheet Table 36 Australian National Accounts: National Income, Expenditure and Product, Sept 2019 (cat. no. 5206.0) Gross domestic product: Current prices (original, derived, annual), series ID: A2304617J.


Investee companies

During the 2018-19 financial year:
  • $1,145m was invested in 320 new investment deals.
  • $307m of follow-on investment was made to 197 existing investment deals.

Investee companies in the late expansion stage accounted for 46% of the total value of investments in 2018-19.

Stage of investee compant, as a percentage of value of investment