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Chart of the week: Domestic fund managers fall behind in Australia

Foreign managers of closed-ended, Australia-focused private equity funds gathered more capital than domestic managers in 2015.

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Australian private equity and venture capital significantly outperformed listed markets in 2015, according to data from the Australian Venture Capital and Private Equity Association and Cambridge Associates. 

PEI’s Research & Analytics team took a closer look at the numbers and found that although returns are strong, capital gathered for closed-ended funds has fallen. In 2015, $941 million was raised from the close of five private equity funds focused exclusively on Australia, a 63 percent fall on the previous year.

Meanwhile, the proportion of foreign investment into the country has increased. Of total capital collected in 2015, 67 percent was raised by fund managers headquartered outside of Australia. Cayman Islands-based EMR Capital closed the largest vehicle in the year, gathering $450 million for EMR Capital Resources Fund 1.

The struggles of intergenerational change experienced by domestic firms such as CHAMP Ventures have been a factor in the proportional increase in foreign investor capital in the market.

However, although no capital has been raised yet in 2016 by either domestic or foreign firms, there are currently 16 vehicles on the road targeting $15.6 billion to invest solely into Australia.