5678.0 - Venture Capital and Later Stage Private Equity, Australia, 2011-12 Quality Declaration 
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 14/02/2013   
   Page tools: Print Print Page Print all pages in this productPrint All


Commitments from investors

Capital pledged by investors, representing the maximum amount that the fund may drawdown from investors.

Debt securities

Debt securities are borrowings which may be traded on secondary markets. Short term debt securities include bills of exchange, commercial paper and promissory notes. They generally have an original term to maturity of 30 to 180 days. Long term debt securities have an original term maturity of more than one year, and include bonds, debentures, convertible notes, and non-participating preference shares. They do not include derivatives.

Drawdowns from investors

For VC&LSPE investment vehicles, this represents the amount of capital committed by investors that actually transferred to a VC&LSPE investment vehicle in aggregate for the life of the fund, and is also known as paid-in capital. Capital returned to investors that is available to be called from investors is excluded from the balance at the end of the financial year. For VC&LSPE investee companies, drawdowns from investors represents paid-up capital as at the end of the year.

Follow-on investment

A subsequent investment made by an investor who made a previous investment in the company; generally equal to a later stage investment in comparison to the initial investment.

Fund of funds

This type of fund pools investments from a diverse range of investors and mainly places its investments with other VC&LSPE investment vehicles who then invest in investee companies. Fund of funds may directly invest in unlisted companies, but these investments are typically undertaken as a co-investment with another VC&LSPE manager who manages the investment.


IPO stands for Initial Public Offering, and is a type of public offering where shares of stock in a company are sold to the general public, on a securities exchange, for the first time.

Late Expansion

Current product improvement or new product development. Continued revenue growth. Approaching, or at, profitable operating levels.

Later stage private equity

An investment in companies in later stages of development, as well as investment in underperforming companies. These companies are still being established, the risks are still high and investors have a divestment strategy with the intended return on investment mainly in the form of capital gains (rather than long-term investment involving regular income streams).


Leveraged Buy-Out (LBO) is the acquisition of another company using a significant amount of borrowed money (bonds or loans) to meet the cost of an acquisition. Often, the assets of the company being acquired are used as the collateral for the loans in addition to the assets of the acquiring company. The purpose of leveraged buyouts is to allow companies to make large acquisitions without having to commit a lot of capital.


The current acquisition of a product or business from either a public or private company often utilizing a significant amount of debt and little or no equity. Includes management buy-out/in (MBO/MBI) and leveraged buy-out/in (LBO/LBI)

Life insurance offices

Life insurances offices must be registered with the Australian Prudential Regulation Authority (APRA). Life insurance offices offer insurance for death or disability and also offer investment and superannuation products. Generally, they have the word “life” in their legal name. They include friendly societies, but exclude insurance companies offering house, car and marine insurance.

Listed shares and units

Listed shares comprise shares in resident companies and units in resident trusts quoted on the ASX. Does not include equity derivatives or shares in foreign companies.


A non-resident is any individual, business or other organisation domiciled overseas. Foreign branches and foreign subsidiaries of Australian businesses are regarded as non-residents.


Investee company is in the process of setting up. Product is in research and development stage.

Privately-owned trading companies

Privately-owned trading companies are those owned and controlled by the private sector and which produce goods or non-financial services for sale at market prices.


An Australian resident is any individual, business or other organisatons domiciled in Australia. Australian branches and Australian subsidiaries of foreign businesses are regarded as Australian residents.


The investment in a business with the intention of listing it on the stock exchange, eventually offering shares to the public.


Investee company is in the process of setting up. Product at testing or pilot production stage.


The investee company is probably not yet fully operational. May or may not be generating revenue.

Superannuation (pension) funds

Superannuation (pension) funds are established to provide benefits for their members on retirement, resignation, death or disablement. A superannuation fund usually takes the legal form of a trust fund. Includes pooled superannuation trusts (PST), approved deposit funds (ADF) and public sector superannuation funds.

Trading enterprises owned by state, territory and local governments

Those businesses which are owned and controlled by state, territory or local governments and which produce goods or non-financial services for sale at market prices. These include non-privatised power authorities, housing commissions, and port authorities.

Trading enterprises owned by the Commonwealth Government

Those businesses which are owned and controlled by the Commonwealth Government and which produce goods or non-financial services for sale at market prices.


Public unit trusts issue units to the general public within Australia and invest the pooled monies. They must have registered a prospectus with the Australian Securities and Investment Commission (ASIC). Some are listed on the Australian Stock Exchange (ASX). There are two broad types of public unit trusts: property and trading trusts; and financial trusts such as mortgage, fixed interest and equity trusts.


Current product turnover stagnant. Flat or declining revenue. Company may not be profitable. Financing provided to a company at a time of operational or financial difficulty with the intention of improving the company's performance.

Unincorporated business not elsewhere covered

These are trading businesses operated by persons either as sole proprietors or in partnerships with other persons. They do not operate through a company structure.

Unlisted equity

These include equity in resident unlisted trusts and resident unlisted participating preference shares.

Unrealised gains/losses

Are the change in the market value of an equity that will only be realised on the sale of the equity.

Venture Capital

A high risk private equity capital for typically new, innovative or fast growing unlisted companies. A venture capital investment is usually a short to medium-term investment with a divestment strategy with the intended return on investment mainly in the form of capital gains (rather than long-term investment involving regular income streams).

Write Offs

Are a writing down of a portfolio company's holdings to a valuation of zero, with the fund receiving no proceeds from their investments.