5655.0 - Managed Funds, Australia, Dec 2000  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 28/02/2001   
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February 28, 2001
Embargoed: 11:30 AM (AEST)

ABS survey shows healthy venture capital investment

At least $829 million was invested in venture capital projects in 1999-2000 financial year according to the results of a new survey by the Australian Bureau of Statistics (ABS), released today. This came from $666 million invested in new venture capital projects plus investments in existing projects of $163 million during the financial year.

The value of exits by venture capitalists from existing investments during the year was $536 million.

The survey, the first of its kind to apply standard statistical concepts to the activity, was conducted with the encouragement and assistance of the Department of Industry, Science and Resources and other Commonwealth agencies.

Most investment in venture capital projects is placed through special purpose venture capital investment vehicles, managed by venture capital managers. These managers identify and evaluate suitable projects and maintain close involvement with them, usually ensuring that the Boards of the companies concerned have sufficient breadth of experience, and access to quality advice. In the longer term, the investors exit from the venture capital investment through a public float or other buy-out of the company. The survey covered investment through venture capital investment vehicles and did not cover direct investments by "business angels".

Other highlights of the survey were:
  • investors have committed $4.9 billion to venture capital investment vehicles, of which $2.6 billion had been provided to venture capital investment vehicles and $2.3 billion had been committed for future investments.
  • venture capital investment vehicles have made investments in venture capital projects of $2.3 billion and held assets of $0.5 million in other types of assets.
  • the survey identified 97 active venture capital managers, who managed 123 investment vehicles;
  • the 123 investment vehicles had 569 investments in venture capital projects;
  • there was venture capital investment in a wide range of industries and activities: investment identified in manufacturing projects was $568 million (25% of the investments in venture capital projects), and property and business services projects of $440 million (19%). There have been investments of $228 million in software (10%), $298 million in internet software and services (9%), and $104 million in biotechnology (5%), amongst a range of other investment activities.
  • Australian superannuation funds were the largest investors in venture capital vehicles. Of the $4.9 billion committed at the end of the financial year, 35% came from Australian superannuation funds followed by 21% from non resident sources.
    Details are in a feature article in Managed Funds, Australia, December Quarter 2000 (cat. no. 5655.0) available from ABS Bookshops. A copy of the article can be found on this web site along with a summary of the main features of the publication.