5678.0 - Venture Capital and Later Stage Private Equity, Australia, 2017-18  
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 28/02/2019   
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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.



COMMITMENTS 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 2018:

  • Commitments increased to $26,898m (up by 19% from 30 June 2017)
  • The contribution of Non-resident investors increased to $12,174m
  • The value of New commitments made during the financial year increased by $2,580m to $5,717m


Graph: Commitments by source of capital as a percentage of total Commitments



VALUE OF INVESTMENT

Since 30 June 2017 the total Value of investments:
  • Increased 4% from $10,575m to $11,001m
  • 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, 2015-16 TO 2017-18

2015-16
2016-17
2017-18

Value of investment $m
9 213
10 575
11 001
Gross Domestic Product (GDP) (a) %
0.56
0.60
0.60

(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 2018 (cat. no. 5206.0) Gross domestic product: Current prices (original, derived, annual), series ID: A2304617J.



INVESTEE COMPANIES

As at 30 June 2018 there were 988 active investment deals in investee companies valued at $11,001m.

During the 2017-18 financial year:
  • $2,089m was invested in 298 new investment deals
  • $514m of follow-on investment was made to 181 existing investment deals


Investee companies in the late expansion stage accounted for 42% of the total value of investments in 2017-18.

Stage of investee company as a percentage of value of investment


In 2017-18 investee companies in the Trade and accommodation industry accounted for 23% of the total value of investment.




Investee companies in the retail, services and real estate group of activities attracted the largest share of investment (42% of the total value of investment).

Activity of investee company as a percentage of value of investment