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Australian GPs raise A$2.7bn in FY2015(1)

The majority of new commitments came from overseas investors, with sovereign wealth funds contributing 26 percent of new fundraising, which is more than superannuation funds and other investor types, according to the Australian Private Equity & Venture Capital Association (AVCAL) 2015 Yearbook.

Dry powder accumulated by Australian general partners ready for future investment stands at A$6.3 billion ($4.5 billion; €4.2 billion), according to the Australian Private Equity & Venture Capital Association (AVCAL) 2015 Yearbook.

Private equity fundraising almost trebled to A$2.7 billion in from the beginning of July 2014 to June 2015, with nine funds successfully recording interim or final closings, including Pacific Equity Partners Fund V and Crescent Capital Partners Fund V, the report showed.?

Total private equity and venture capital fundraising for FY2015 reached the second highest level seen in the last eight years, to A$3.1 billion and just behind the A$3.3 billion that was raised in FY2012. This was almost triple the level recorded in the previous year.

The majority of new commitments came from overseas investors, with sovereign wealth funds contributing 26 percent of new fundraising, which is more than superannuation funds and other investor types, according to the yearbook. A surge in interest from LPs from Asia saw this investor group alone matching the level of new commitments by Australian limited partners.

“Private equity investment was healthy in FY2015, with managers having some clear air after an exceptionally busy year of exit activity during 2014,” AVCAL chief executive officer Yasser Al Ansary wrote in the foreword of the yearbook produced in association with Ernst & Young.

“The pipeline for new investment over the period ahead looks positive, and there is a clear opportunity to drive new investment activity even further if existing roadblocks are removed,” Al Ansary wrote.

These roadblocks include uncompetitive and inconsistent tax and regulatory frameworks that constrain the capacity of private equity funds to raise new capital from superannuation funds, high net worth investors, corporates and family offices.

Al Ansary also wrote that with targeted changes in key areas of policy, Australian businesses would stand to benefit from access to a larger marketplace of private capital to fund their growth and expansion plans.

Private equity investment activity was 54 percent higher year-on-year in FY2015 at A$3.3 billion. Both domestic and international corporates presented a number of buyout opportunities, including Archer Capital’s acquisition of Dun & Bradstreet’s ANZ business and the sale by Nine Entertainment of its Nine Live division to Affinity Equity Partners. ?

International General Partners accounted for some of the largest deals of the year, such as the acquisition of Leighton Holdings’ services division by Apollo Global Management and Orica’s chemicals business by Blackstone. ?

Mid-market activity also featured prominently, with expansion and growth private equity investment rising nearly two-fold in FY2015 to over A$1.3 billion invested in 50 companies.