5678.0 - Venture Capital and Later Stage Private Equity, Australia, 2014-15 Quality Declaration 
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 11/02/2016   
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ANALYSIS OF RESULTS


INVESTORS

There were $19,946m committed to VC&LSPE investment vehicles as at 30 June 2015. Of this, $4,571m was committed via fund of funds investment vehicles.

The following graph presents committed investment from VC&LSPE investors by type of investor for the period 2010-11 to 2014-15. Resident pension funds (42%) were the largest source of funds, in terms of committed funds to VC&LSPE investment vehicles.

COMMITMENTS FROM INVESTORS BY INVESTOR TYPE, percentage of total investment in VC&LSPE vehicles - 2010-11 to 2014-15
Graph shows commitments from investors by investor type



VC&LSPE MANAGERS AND INVESTMENT VEHICLES

There were 121 active VC&LSPE managers who were managing 210 VC&LSPE investment vehicles. Of the 121 active VC&LSPE managers, 48% reported that they prefer to invest in VC investments only, 27% prefer LSPE investments only and 25% prefer to invest in both VC and LSPE investments (refer to paragraph 13 of the Explanatory Notes regarding the stages of investment). The following table shows the breakdown of managers and vehicles by preferred category of investment.

VC&LSPE managers and investment vehicles, by focus of fund - 2013-14 and 2014-15

VC&LSPE managers
VC&LSPE vehicles
no.
%
no.
%

2013-14
VC only
61
49
92
42
LSPE only
37
30
95
43
Both VC&LSPE
27
22
34
15
Total
125
100
221
100
2014-15
VC only
58
48
94
45
LSPE only
33
27
81
39
Both VC &LSPE
30
25
35
17
Total
121
100
210
100



The stage of investment preferred by VC&LSPE fund managers was related to the value of the fund’s assets. VC&LSPE vehicles with less than $10m in total assets mostly focused on VC only investments (58%). While VC&LSPE vehicles with more than $25m in total assets were mostly focused into LSPE only investments (43%).

VC&LSPE managers preferred stage of investment(a), by investment vehicle assets - 2014-15

VC only
LSPE only
Both VC&LSPE
Total
no.
no.
no.
no.

Less than $10m
31
8
14
53
$10m to less than $25m
13
5
3
21
$25m or more
14
20
13
47
Total
58
33
30
121

(a) Refer to paragraph 13 of the Explanatory Notes.

VC&LSPE investment vehicles had net assets of $9,673m as at 30 June 2015, a rise of $280m from 30 June 2014. The majority (50%) of the 210 VC&LSPE vehicles were trusts.

As at 30 June 2015, 102 of the 210 VC&LSPE vehicles were participating in a government program, an increase of four investment vehicles from 2013-14.

The majority of returns on investment to investors is through exits from investments. The value of exits through trade sales was $571m in 2014-15.

VC&LSPE vehicles used three valuation methods in 2014-15 (refer to paragraph 15 of the Explanatory Notes regarding valuation basis). Directors’ valuation (142 vehicles) was the most frequently used method, followed by cost value/book valuation (43 vehicles), and independent valuation methods (25 vehicles).


INVESTEE COMPANIES

At the beginning of the 2014-15 financial year there were 652 active VC&LSPE investment deals valued at $7,907m. During the 2014-15 financial year $1,383m was invested in new VC&LSPE investment deals, and an additional $415m of follow-on investment was made to existing VC&LSPE investment deals. Following revaluations and exits of investee companies during the year, there were 693 continuing VC&LSPE investment deals valued at $8,802m at the end of the 2014-15 financial year.

Investee companies in the late expansion stage accounted for $3,505m or 40% of the total value of investments at the end of the 2014-15 financial year.
PERCENTAGE VALUE OF INVESTMENT, by investee stage(a)(b)
Graph shows the percentage value of investment by investee stage


The majority of the total value of investments was in VC&LSPE investee companies with head offices in New South Wales and Victoria (41% and 17% respectively), while offshore investee companies accounted for 15% of total investment in 2014-15.

In 2014-15, the Health care and social assistance industry had the highest proportion of VC&LSPE investment (19%), followed by the combined Trade and accommodation industries (16%).

PERCENTAGE VALUE OF INVESTMENT, by industry of investee(a)(b)
Graph shows the percentage value of investment by industry of investee


When analysed by activity, as defined by the Standard and Poor's Global Industry Classification Standard, the Retail, services and real estate group of activities attracted the largest share of investment, with $3,174m or 36% of total investment as at 30 June 2015. This was followed by the Manufacturing and transport group of activities, with $2,308m or 26%.

PERCENTAGE VALUE OF INVESTMENT, by activity of investee(a)(b)
Graph shows the percentage value of investment by activity of investee