5678.0 - Venture Capital, Australia, 2003-04  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 26/11/2004   
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November 26, 2004
Embargoed 11:30am (AEST)

Investing in Venture Capital reaps rewards in 2003-04: ABS

Venture capital investors had a successful year in 2003-04 in bringing investments to the market, according to figures released today by the Australian Bureau of Statistics (ABS).

The total value of all exits from investments through trade sales, initial public offers and buyback amounted to $1,460 million (m) in 2003–04.

This represented $729m of investment and $731m profit over the life of the investments. This compares to the total value of all exits $331m in 2002–03, comprising of $212m of investment and $119m in profits.

There has been considerable growth in venture capital markets in Australia in recent years. Commitments by investors to fund new ventures increased to $9 billion (b) over the year to June 2004 (up 19%). This was up slightly on the previous year's 10% increase.

There was an 8% increase in funds actually drawn from these investors (to $5.1b), leaving $3.9b of committed funds yet to be called on. Approximately 93% of drawn funds were from Australian investors.

There were 195 venture capital investment funds and companies at June 2004, who had investments in 909 young or innovative companies (up 2.2% on the previous year).

At June 2004, manufacturing and transport related activities had attracted the largest share of venture capital investment (36%), followed by retail, services and real estate related activities (27%).

Venture capital is high risk capital directed towards new or young businesses with the prospect of rapid growth and high rates of return. This venture capital survey was conducted by the ABS with the assistance of the Department of Industry, Tourism and Resources.