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Private Equity News Australia: Latest Developments in the Industry

Understanding Private Equity in Australia is essential to appreciate the role it plays in the country's economy. Private equity firms have been involved in various sectors, including healthcare, technology, and infrastructure.

These firms have been instrumental in driving growth and innovation in these sectors, providing capital and expertise to help companies expand and thrive.

Private Equity News Australia covers the latest developments and trends in the industry. It provides insights into notable deals, IPOs, and fundraising activities of private equity firms.

It also highlights the role of major banks and financial institutions in the industry and the impact of the global economy and interest rates on private equity investments. Private Equity News Australia is a valuable resource for investors, entrepreneurs, and other stakeholders interested in the private equity industry in Australia.

Key Takeaways

• Private equity is a significant player in the Australian financial market, with notable deals and IPOs in various sectors.

• Private equity firms provide capital and expertise to help companies expand and thrive, driving growth and innovation in different sectors.

• Private Equity News Australia is a valuable resource for investors, entrepreneurs, and other stakeholders interested in the private equity industry in Australia.

Understanding Private Equity in Australia

Private equity is an alternative investment industry that deals with buying and selling private companies or taking them public. In Australia, private equity firms typically invest in companies that are undervalued, underperforming, or in need of restructuring.

These firms use their expertise and resources to improve the performance of these companies and sell them for a profit.

The private equity industry in Australia has grown significantly over the past decade, with many firms raising large amounts of capital from institutional investors such as superannuation funds.

According to BDO Australia, the total value of private equity deals in Australia in 2021 was USD $10.8 billion, up from USD $8.6 billion in 2020.

Private equity firms in Australia operate in a range of industries, including technology, healthcare, retail, and infrastructure.

They typically invest in companies with strong growth potential and a proven track record of success. Private equity firms may also provide strategic guidance and operational support to the companies they invest in.

Investing in private equity can be a high-risk, high-reward proposition. Private equity firms typically invest large amounts of capital in a single company, which can result in significant losses if the investment does not perform as expected.

However, successful private equity investments can generate significant returns for investors.

Overall, the private equity industry in Australia is a dynamic and growing sector that offers opportunities for both investors and companies.

Private equity firms bring expertise and resources to the companies they invest in, which can help to drive growth and create value. Investors in private equity can benefit from the potential for high returns, but should also be aware of the risks involved.

Notable Private Equity Firms and Dealmakers

Private equity is a type of investment in which investors provide funds to private companies or acquire them outright. In Australia, private equity firms are responsible for deploying billions of dollars in capital, and some of the most notable firms and dealmakers include:

Pacific Equity Partners (PEP)

PEP is one of Australia's largest private equity firms, with over $12 billion in funds under management. The firm has a diverse portfolio of investments, including companies in the healthcare, consumer goods, and financial services sectors. In 2021, PEP completed the acquisition of Australian supermarket chain, Coles Group, in a deal worth $23 billion.

TPG

TPG is a global investment firm that operates across a range of industries, including healthcare, technology, and real estate. In Australia, TPG has invested in companies such as Alinta Energy and Inghams Enterprises. In 2021, the firm acquired Australian software company, MYOB, in a deal worth $2 billion.

Carlyle Group

The Carlyle Group is a global investment firm with over $260 billion in assets under management. The firm has a significant presence in Australia, with investments in companies such as Coates Hire and Accolade Wines. In 2021, Carlyle Group acquired a majority stake in Australian logistics company, Linfox, in a deal worth $2.5 billion.

Quadrant Private Equity

Quadrant Private Equity is an Australian-based private equity firm that has invested in companies such as Fitness First and Grill'd. In 2021, the firm acquired a majority stake in Australian skincare company, Sand & Sky, in a deal worth $100 million.

CVC Capital Partners

CVC Capital Partners is a global private equity firm with over $114 billion in assets under management. In Australia, the firm has invested in companies such as Nine Entertainment and PEXA. In 2021, CVC Capital Partners acquired a majority stake in Australian waste management company, Bingo Industries, in a deal worth $2.6 billion.

KKR

KKR is a global investment firm that operates across a range of sectors, including healthcare, infrastructure, and technology. In Australia, the firm has invested in companies such as MYOB and Pepper Group. In 2021, KKR acquired a majority stake in Australian healthcare company, GenesisCare, in a deal worth $1.7 billion.

Chris Hadley

Chris Hadley is a prominent Australian dealmaker who has worked with private equity firms such as Pacific Equity Partners and Quadrant Private Equity. Hadley has been involved in some of Australia's largest private equity deals, including the acquisition of Coles Group by PEP.

These are just a few of the notable private equity firms and dealmakers operating in Australia. Private equity is a dynamic and rapidly evolving industry, and these firms and individuals will continue to play a significant role in shaping the Australian business landscape in the years to come.

Key Private Equity Deals and IPOs

Private equity deals and IPOs have been making headlines in Australia in recent years. In 2022, private equity-backed mergers and acquisitions targeting local companies surged to a record $40.1 billion in the first five months of the year, as global investors continued to pour money into the country's booming economy.

In one of the biggest deals of the year, private equity firm KKR & Co. Inc. agreed to acquire Australian accounting software provider MYOB Group Ltd. for AUD 2.2 billion ($1.6 billion). The deal was completed in July 2022, and KKR said it plans to help MYOB expand its product offerings and accelerate its growth in Australia and New Zealand.

Private Equity News Australia

Another notable deal was the AUD 1.1 billion ($820 million) acquisition of Australian healthcare provider Healius Ltd. by private equity firm BGH Capital. The deal, which was announced in March 2022, was the largest private equity buyout in Australia in more than a decade. BGH Capital said it plans to invest in Healius' infrastructure and technology to improve patient care and support the company's growth.

In the IPO market, Australian fintech firm Zip Co Ltd. raised AUD 1.5 billion ($1.1 billion) in its debut on the Australian Securities Exchange (ASX) in June 2022. The company's shares surged more than 40% on their first day of trading, making it one of the most successful IPOs in Australia in recent years.

In another notable IPO, Australian online retailer Kogan.com Ltd. raised AUD 109 million ($81 million) in its debut on the ASX in July 2022. The company's shares rose more than 10% on their first day of trading, and Kogan.com said it plans to use the proceeds to expand its product offerings and invest in technology and marketing.

Overall, private equity deals and IPOs continue to be a key driver of growth and innovation in Australia's economy. With strong investor demand and a growing pipeline of promising companies, the outlook for private equity and IPO activity in the country remains positive.

Role of Major Banks and Financial Institutions

Major banks and financial institutions play a crucial role in private equity in Australia. They are responsible for providing funding to private equity firms and their portfolio companies. They also offer a range of services such as debt financing, underwriting, and advisory services.

UBS is one of the major banks that has a strong presence in the Australian private equity market. The bank provides financing solutions to private equity firms and their portfolio companies. It also offers advisory services such as mergers and acquisitions, restructuring, and capital raising.

Goldman Sachs is another major player in the Australian private equity market. The bank has a strong track record of providing financing solutions to private equity firms and their portfolio companies. It also offers a range of advisory services such as mergers and acquisitions, restructuring, and capital raising.

Link is a leading provider of administration services to the Australian private equity market. The company provides a range of services such as fund administration, accounting, and investor reporting. It also offers technology solutions to private equity firms and their portfolio companies.

Private Equity News Australia

In addition to providing funding and advisory services, major banks and financial institutions also play a key role in shaping the regulatory environment for private equity in Australia. They work closely with regulators to ensure that the industry operates in a transparent and efficient manner.

Overall, major banks and financial institutions are critical to the success of the private equity industry in Australia. They provide vital funding and advisory services, and help to shape the regulatory environment in which the industry operates.

Infrastructure and Venture Capital Investments

Private equity firms in Australia are increasingly investing in infrastructure and venture capital. According to the Australian Infrastructure Investment Report 2022 by Infrastructure Partnerships Australia and Allens, there is a wave of private capital ready to invest in Australia's infrastructure decarbonisation agenda. The report captures the views of international and Australian investors who together collectively own or manage over A$680 billion of infrastructure assets across the globe.

In fact, the report shows that private capital assets in Australia have grown to a record $77 billion, which includes assets in private equity, venture capital, infrastructure, real estate, natural resources, and private debt funds. Private equity (PE) and venture capital (VC) registered four years of consecutive growth for the first time in Australia. The latest numbers from the KPMG Private Enterprise Venture Pulse report also show that despite global venture capital falling from $730.5 billion to $493.6 billion in 2022, Australian startups continued to attract record amounts of investment. KPMG Venture Pulse data tracked 623 Australian VC deals in 2022, down from 735 in 2021.

Infrastructure investors are attracted to Australia's stable political environment, strong rule of law, and high-quality infrastructure. The country's infrastructure sector is also seeing increased investment in renewable energy, including solar and wind power. The Australian government has set a target of achieving net-zero emissions by 2050, which is driving investment in renewable energy and other decarbonisation initiatives.

Venture capital investments are also on the rise in Australia, particularly in the technology and telecom sectors. The country's startup ecosystem is growing, with companies such as Atlassian, Canva, and Afterpay achieving global success. The government is also providing support for startups through initiatives such as the R&D Tax Incentive and the Entrepreneurs' Programme.

Overall, private equity firms in Australia are increasingly looking to invest in infrastructure and venture capital, driven by the country's stable political environment, strong rule of law, and high-quality infrastructure. The government's focus on decarbonisation and support for startups is also driving investment in these sectors.

Private Equity News and Trends

Private equity is a type of investment that involves the purchase of private companies or publicly traded companies that will be taken private. This type of investment has been gaining popularity in Australia in recent years, with many investors looking to get in on the action. Here are some of the latest news and trends in private equity in Australia.

News

• AVC, Australia's second-largest pubs group, has reported a 7% increase in sales thanks to private equity buyouts.

• An international private equity firm is set to exit an Australian insurance company in a reported $700 million sale to a global business.

• The private capital industry in Australia grew in 2021 despite ongoing challenges related to COVID-19, with assets under management reaching a record $90 billion.

Trends

• The private equity market in Australia is expected to continue to grow in the coming years, with many investors looking to take advantage of the high returns that can be achieved.

• The use of technology and data analytics is becoming increasingly important in the private equity industry, with many firms using these tools to identify investment opportunities and manage risk.

• Environmental, social, and governance (ESG) considerations are also becoming more important in the private equity industry, with many investors looking for companies that are committed to sustainable practices.

Journal and Research

• The Australian Private Equity & Venture Capital Journal is a professional periodical that provides insights into the private equity industry in Australia.

• Preqin is a leading provider of data and research on the private equity industry, providing insights into market trends and investment opportunities.

Overall, the private equity industry in Australia is experiencing significant growth, with many investors looking to get in on the action. With the use of technology and data analytics, as well as a focus on ESG considerations, the industry is poised for continued success in the coming years.

Impact of Global Economy and Interest Rates

Private equity activity in Australia is influenced by various factors, including the global economy and interest rates. The global economy plays a significant role in driving private equity activity in Australia. Changes in the global economy can affect the availability of capital, which, in turn, impacts the deal-making process.

One of the most critical factors that impact private equity activity in Australia is interest rates. Interest rates have a direct impact on the cost of borrowing, which affects the profitability of private equity investments. When interest rates are low, private equity firms can borrow money at a lower cost, which makes it easier for them to finance their investments.

Inflation is another factor that can impact private equity activity in Australia. Inflation can erode the value of investments, making it more challenging to generate returns. Private equity firms need to take into account the impact of inflation on the investments they make to ensure that they can generate returns that exceed the rate of inflation.

The equity market is another factor that can impact private equity activity in Australia. Changes in the equity market can affect the valuation of companies, which, in turn, impacts the deal-making process. Private equity firms need to keep a close eye on the equity market to identify potential investment opportunities and to ensure that they can generate returns that exceed the market average.

Overall, the global economy and interest rates are critical factors that impact private equity activity in Australia. Private equity firms need to stay abreast of changes in the global economy and interest rates to ensure that they can make informed investment decisions. By doing so, they can generate returns that exceed the market average and provide value to their investors.

Private Equity in Different Sectors

Private equity deals in Australia are not limited to a particular sector. Private equity firms invest in a wide range of industries, including healthcare, resources, and education. In 2021, the healthcare sector was the most active, with a total deal value of USD 1.6 billion, followed by the resources sector, with a total deal value of USD 1.4 billion.

In the healthcare sector, private equity firms are investing in companies that provide medical services and products. For example, in 2021, Advent International acquired a majority stake in Australian radiology provider I-MED Network, with a deal value of USD 1.2 billion. Another notable deal in the healthcare sector was the acquisition of Australian pathology company Australian Clinical Labs by Crescent Capital Partners for USD 450 million.

The resources sector has also been a popular target for private equity firms in Australia. Private equity firms are investing in companies that are involved in mining, exploration, and energy. In 2021, Resource Capital Funds acquired a stake in Australian gold miner, Red 5, with a deal value of USD 125 million. Another notable deal in the resources sector was the acquisition of Australian mining services company, Mastermyne, by EMR Capital and PT Bayan Resources for USD 95 million.

The education sector has also seen private equity investment in Australia. Private equity firms are investing in companies that provide education services, such as vocational training and higher education. In 2021, BGH Capital acquired a majority stake in Navitas, an Australian education provider, with a deal value of USD 1.5 billion.

Overall, private equity firms in Australia are investing in a diverse range of sectors, with healthcare, resources, and education being some of the most active. Private equity firms are attracted to companies with strong growth prospects, a competitive advantage, and a clear path to exit.

Role of Family Offices and Fundraising

Family offices have increasingly become a significant source of capital for private equity (PE) firms in Australia. According to a KPMG report, family offices are now competing with institutions as the preferred buyers of private assets, and they are increasingly active in venture capital (VC) investments. Their founders/principals are being sought out for their ability to add value beyond the provision of capital, thanks to their vast business experience and insights.

Family offices are pools of capital that are set up to manage the wealth of high net worth families. They are structured to provide a range of services, including investment management, estate planning, philanthropy, and tax planning. They are typically more flexible and have a longer-term investment horizon than traditional institutional investors, making them an attractive source of capital for PE firms.

Fundraising is a critical aspect of private equity, and family offices are becoming an increasingly popular capital source for alternative investment managers. Private wealth platforms and family offices represent a fast-growing and increasingly popular capital source for alternative investment managers. For private equity firms, advisors, and intermediaries, marketing is educational as well as product-driven.

The family office appetite for private equity has burgeoned as recent market volatility has spurred family offices to gravitate towards investments that give them a better sense of control and oversight. Family offices are also increasingly investing in private debt, seeking higher yields and diversification from traditional fixed-income investments.

In terms of fundraising, private equity firms raised a record $6.6 billion in Australia in 2021, according to the Australian Financial Review. This was supported by a strong fundraising environment, low-interest rates, and healthy capital markets. Family offices were a significant contributor to this fundraising activity, with many firms raising capital from high net worth families.

In conclusion, family offices are becoming an increasingly important source of capital for private equity firms in Australia. They offer flexibility, longer-term investment horizons, and valuable business experience and insights. Private equity firms are increasingly turning to family offices for fundraising, with many firms raising a significant amount of capital from high net worth families.

Events and Interviews

Private equity and venture capital events are a great way for industry professionals to network, learn about new trends, and stay up-to-date on the latest news. In Australia, there are several events throughout the year that cater to the private equity and venture capital industry.

One of the most prominent events is the Australian Investment Council's annual conference, which brings together industry leaders, investors, and government representatives to discuss the latest trends and opportunities in the private equity and venture capital space. Other notable events include the AVCJ Private Equity & Venture Forum, the Private Equity Media Symposium, and the Women in Private Equity & Venture Capital Summit.

In addition to events, there are also several interviews with industry experts that provide valuable insights into the private equity and venture capital industry. The Australian Financial Review regularly interviews private equity executives and investors, providing an in-depth look at the latest trends and opportunities in the industry.

Private Equity Media also conducts interviews with industry experts, providing insights into the latest deals, trends, and opportunities in the private equity and venture capital space. These interviews are a great way for industry professionals to stay up-to-date on the latest news and developments in the industry.

Overall, events and interviews are an important part of the private equity and venture capital industry in Australia. They provide valuable opportunities for networking, learning, and staying up-to-date on the latest news and trends in the industry.

Private Equity and the War in Ukraine

The war in Ukraine has had significant implications for the private equity industry, particularly in Europe. The conflict has created a highly volatile and uncertain geopolitical environment, which has impacted private equity activity in the region.

According to a report by Private Equity International, Russia's military incursion into Ukraine could set back the development of Ukraine's small but growing private equity market. The report suggests that the conflict has led to a more fractured world, resulting in more segmented markets for capital.

Despite the uncertainty caused by the war, private equity houses in Ukraine are still doing deals. New data shows that there is still life in Ukraine's emerging private equity and venture capital markets, as reported by Private Equity News. However, the war and consequent dislocation in global energy markets have led to the spectre of rising inflation, increased interest rates and significant market volatility, as reported by Allens.

The war in Ukraine has also highlighted the importance of clean energy sources and the transition towards renewable energy. The European Commission has proposed a plan to make Europe independent from Russian fossil fuels well before 2030, and explicitly prioritised the clean energy transition, as reported by Private Equity News.

In conclusion, the war in Ukraine has created a highly uncertain and volatile environment for private equity activity in the region. While private equity houses in Ukraine are still doing deals, the conflict has led to a more fractured world, resulting in more segmented markets for capital. The importance of clean energy sources and the transition towards renewable energy has also been highlighted.

Frequently Asked Questions

What are the latest private equity deals in Australia?

The Australian private equity market has seen a number of significant deals in 2023. One notable transaction was the acquisition of Subway by Roark Capital for $14.8 billion. This deal highlights the ongoing interest of private equity firms in the food and beverage sector.

What impact will mergers and acquisitions have on the Australian private equity industry?

Mergers and acquisitions (M&A) activity is a key driver of the private equity industry in Australia. As firms look to expand their portfolios and increase their returns, M&A provides an attractive opportunity to acquire new assets. However, M&A can also be a risky strategy, and firms must carefully consider the potential risks and rewards before pursuing such transactions.

How has the Australian private equity market performed in 2023?

Despite ongoing challenges related to COVID-19, the Australian private equity market has continued to grow in 2023. Industry assets under management (AUM) reached a record $90 billion as of June 2023, up 11% from $81 billion in December 2022, and 42% higher than $64 billion in December 2021. This growth has been driven by a number of factors, including increased investor interest and a strong pipeline of investment opportunities.

What are the key trends in private equity news in Australia?

One key trend in the Australian private equity market is the increasing focus on environmental, social, and governance (ESG) issues. Firms are increasingly incorporating ESG considerations into their investment strategies, and are looking for ways to create value while also promoting sustainability and social responsibility.

What are the challenges facing private equity firms in Australia?

One of the main challenges facing private equity firms in Australia is the competitive landscape. With a growing number of firms competing for a limited pool of investment opportunities, firms must be strategic in their approach and focus on building strong relationships with key stakeholders.

How are Australian private equity firms responding to changing market conditions?

Australian private equity firms are responding to changing market conditions by adopting a more flexible and agile approach. Firms are looking for new ways to create value and are exploring new sectors and investment strategies. Additionally, firms are investing in technology and data analytics to better understand market trends and identify new opportunities.