Top Private Equity Firms in Australia - Australian Private Equity Firms Guide
Private Equity Firms Australia List - Australian Private Equity Firms Guide
Welcome to our Private Equity Australia guide to the most active Australian Private Equity firms right now in our guide to the Top Private Equity Firms Australia.
Australia's private equity landscape has grown in prominence over the past few years, attracting top firms across the globe so let's take a look at our new PE Firms Australia Guide to the Top 10 Private Equity Firms in Australia and the Biggest Private Equity Firms in Australia.
Top Private Equity Firms Australia
Australia is home to some of the top private equity firms in the world and these firms have a proven track record of investing in high-growth companies and generating substantial returns for their investors.
Pacific Equity Partners
Pacific Equity Partners (PEP) is one of the largest private equity firms in Australia, with over AUD 15 billion in funds under management and was founded in 1998 and has since invested in over 35 companies across a range of industries, including healthcare, retail, and manufacturing.
PEP has a reputation for being a hands-on investor, working closely with management teams to drive growth and operational improvements.
BGH Capital
BGH Capital is a relatively new player in the Australian private equity market, having been founded in 2017 by former executives from TPG Capital and Macquarie Group and, despite its short history, BGH has quickly established itself as a major player, with over AUD 7 billion in funds under management.
KKR
KKR is a global private equity firm with a significant presence in Australia. The firm has invested in a number of high-profile Australian companies, including MYOB and GenesisCare.
Quadrant Private Equity
Quadrant Private Equity is one of the oldest and most established private equity firms in Australia, having been founded in 1996 and has a strong track record of investing in mid-market companies across a range of sectors, including healthcare, retail, and consumer goods.
Carlyle Group
The Carlyle Group is a global private equity firm with a significant presence in Australia and has invested in a number of high-profile Australian companies, including Coates Hire and Healthscope.
Blackstone Group
The Blackstone Group is one of the largest private equity firms in the world, with a significant presence in Australia and has invested in a number of high-profile Australian companies, including Ixom and TEG.
Private Equity Firms in Australia: An Expert Guide for 2023
The private equity market in Australia has experienced significant growth in recent years, driven by an increasing number of investors looking for alternative investment opportunities.
As a result, demand for private equity investments in Australia continues to rise, demonstrating the strong fundamentals and resilience of the Australian market.
The Australian private equity industry is particularly attractive for investors seeking higher returns than those offered by traditional capital markets, such as US and European markets.
One reason for this is that the Australian market offers a wide range of investment opportunities, spanning various industry sectors, such as healthcare, consumer goods, infrastructure, and technology.
A key driver of growth in the private equity sector in Australia is the availability of capital.
The market has witnessed a surge in fundraising activities, with private equity firms amassing record levels of capital for investment in diverse sectors across the region.
This influx of capital has resulted in increased competition among private equity firms, leading to higher valuations and tighter deal terms to secure attractive assets.
Another factor contributing to the thriving private equity industry in Australia is the strong support received from institutional investors, including superannuation funds and sovereign wealth funds.
These entities play a crucial role in providing capital and backing deals, as they recognise the potential of private equity in generating high returns and diversifying their investment portfolios.
Despite the noticeable growth, the Australian private equity market continues to face challenges, such as regulatory hurdles and increased scrutiny from policymakers.
Notable Deals and Investments
In recent years, the Australian private equity market has witnessed some remarkable deals and investments involving major entities across various industries.
For instance, the acquisition of Vocus Group, a leading telecommunications company, was a noteworthy deal in the country's private equity landscape.
The increased investments in this sector show the confidence and growth prospects for Australian businesses.
The healthcare industry also attracted considerable private equity investments.
For instance, the acquisition of Healius, a prominent radiology provider, highlights the increasing attraction of the healthcare sector for private equity firms.
This deal demonstrates the increasing interest and focus on healthcare services, given the growing demand and favourable market conditions.
In the travel and tourism industry, the acquisition of TripADeal, an online travel agency, by a private equity firm showed the potential of the industry and a strategic move for expansion.
Despite the challenges posed by the COVID-19 pandemic, the deal presented new opportunities in the domestic travel market and enhanced online offerings attracting a broader customer base.
The hospitality sector in Australia also saw significant investments, with the Australian Venue Co being a key player.
A private equity firm invested in the business, allowing the company to expand its portfolio of venues across the country.
This investment further underlined the strength of the Australian hospitality and leisure industry, as the business aimed to enter new markets and capitalise on its growth potential.
In the aviation industry, the acquisition of Virgin Australia by a private equity firm marked a turning point for the airline.
After facing financial challenges, the private equity firm's investment provided much-needed support for Virgin Australia to restructure its operations and regain its position in Australia's aviation market.
Lastly, the acquisition of Village Roadshow, a leading entertainment company, by a private equity firm demonstrated the attractiveness of the Australian media and entertainment sector.
The deal allowed Village Roadshow to explore the potential of expanding its business, including the possible development of new attractions and the enhancement of existing offerings.
Overall, these notable deals and investments across various Australian industries showcase the significant role private equity firms play in driving growth, innovation and expansion for companies in the region.
Top Private Equity Firms Australia Guide
Challenges and Opportunities
The private equity market in Australia has faced numerous challenges in recent times. Factors like the fluctuating Australian dollar against the US dollar and political unrest have impacted the market.
Some big names in the industry like Dick Smith and Spotless, which were backed by private equities, struggled in 2016.
Despite these obstacles, the private capital industry in Australia saw significant growth in 2021.
Industry assets under management (AUM) reached a record $90bn as of June 2021, an 11% increase from $81bn in December 2020, and a 42% growth compared to $64bn in December 2019.
Several key factors contributed to this expansion, such as an increased appetite for private equity firms in sectors like childcare.
Infrastructure-focused private equity funds have emerged as noteworthy winners in recent years.
During the financial year 2021 (FY21), Australia's top five deals in terms of value involved infrastructure assets, accounting for 66% of the total deal value during that period.
Year-on-year, Australian private equity deal volume grew from 124 during the financial year 2020 (FY20) to 134 in FY21.
This growth presents numerous opportunities for private equity firms in Australia.
As the market continues to expand, businesses and investors alike can expect increased profits and revenues.
Furthermore, the rising demand for private equity investments in sectors like childcare and infrastructure suggests a promising outlook for the Australian private equity landscape.
Emerging Trends in Private Equity
The Australian private equity landscape is seeing significant shifts, with new trends emerging across infrastructure, venture capital, and distressed debt investments.
Market participants are becoming more bullish on prospects for rising acquisition activity as fears of a deep recession start to subside.
One trend to note is the increasing importance of infrastructure investments.
As the country's need for critical projects in transportation, energy, and utilities sector grows, private equity firms are stepping up to provide essential financing.
Infrastructure investments offer a stable, long-term return on capital, making them attractive for both domestic and international investors.
Venture capital, another key component of the private equity ecosystem, has witnessed tremendous growth in Australia.
A new generation of private capital dealmakers are making their mark, tapping into the $26 billion dry powder available for deployment and the $3.3 trillion in assets held by Australian super funds.
This growth in venture capital investments can be attributed to the emergence of innovative startups in the technology and life sciences sectors, illustrating the country's potential as a hub for cutting-edge businesses.
Alongside infrastructure and venture capital, distressed debt is gaining prominence in the Australian private equity market.
Economic volatility has led to an increase in distressed assets, creating attractive investment opportunities for firms with experience in turnaround management.
Private equity firms are leveraging their expertise and operational acumen to revitalise struggling businesses, generating value for both the individual companies and the overall economy.
Another critical aspect of the Australian private equity landscape is the growing involvement of foreign acquirers and investors.
Approximately 58% of Australian private equity deals in FY22 and FY23 involved foreign participants, compared to 48% in FY19 to FY21.
This influx of foreign capital demonstrates the attractiveness of Australia's market and contributes to the industry's strong growth.
In summary, the Australian private equity market is evolving, with infrastructure, venture capital, and distressed debt investments gaining prominence.
Top Private Equity Firms Australia
Understanding Fundraising and Valuations
In recent years, Australia has seen a surge in PE fundraising, with some firms making notable strides in their fundraising efforts.
A key contributor to this trend is the increased participation of superannuation funds and the involvement of family offices and wealth managers in the sector.
In 2022, Australia-focused private equity and venture capital (PEVC) fundraising reached record highs, showcasing the growing confidence of limited partners in the Australian market.
One such example is BGH Capital, an Australian PE firm that adopted a growth outlook on distressed sectors like travel and leisure, acquiring companies such as Village Roadshow and Tripadeal.
This acquisition spree was made possible by their successful fundraising efforts, positioning them as a prominent player in the Australian market.
The key takeaway from understanding fundraising and valuations is the necessity for private equity firms in Australia to continually raise capital and accurately assess business prospects in order to remain competitive and succeed in the market.
Private Equity Australia: Key Insights and Trends for 2023
Private equity in Australia has become a key player in the country's investment landscape, contributing significantly to the growth of various sectors.
For both local and international investors, this investment instrument offers the opportunity to tap into the potential of Australia's thriving industries.
The private equity ecosystem in Australia is diverse, with numerous firms actively deploying capital in a range of sectors, including industrial companies, financial services, and technology.
Over the years, the Australian private equity market has evolved, witnessing significant deals and adapting to global trends.
As the industry continues to mature and navigate challenges such as geopolitical tensions and the Covid-19 pandemic, it remains focused on meeting Environmental, Social, and Governance (ESG) requirements and driving sustainable growth in portfolio companies.
Fundraising and valuation trends also play a crucial role in shaping the dynamics of the private equity market, as investors and firms alike seek to balance risk and return.
Top Private Equity Firms Australia - Key Takeaways
Private equity is an important player in Australia's investment landscape, contributing to the growth of various industries.
The industry has evolved over time, witnessing significant deals and adapting to global trends, while striving to meet ESG requirements.
Fundraising and valuation trends play a crucial role in shaping the private equity market dynamics in Australia.
Overview of Private Equity in Australia
Private equity (PE) in Australia has been evolving over the years, with an increasing number of investors seeking diverse opportunities from a broader range of asset classes.
The market has shown resilience amidst economic disruptions such as the COVID-19 pandemic, and is expected to continue growing.
Australasian PE funds predominantly favour buyouts, which saw buyout funds representing 23% of the funds closed and 62% of the total private capital raised in the 2021 financial year.
International investment has grown stronger, contributing to the funds' performance.
Fundraising in the Australian private equity market has become competitive in recent times.
While PE revenue is estimated to have declined by 3.5% in 2020-2021 due to the pandemic disruptions, it is projected to grow at a rate of 2.6% in the coming years, reaching $725.3m by 2025-26.
Investments in the Australian PE market span across various sectors, including technology, healthcare, financial services, and consumer products.
Innovative companies with high growth potential and established businesses with potential for operational improvements are among the top targets of private equity firms.
In order to participate in the Australian private equity market, investors typically involve institutional players such as pension funds, insurance companies, and sovereign wealth funds.
Individual investors can also invest in private equity, albeit through limited partnerships or other investment vehicles.
Overall, the Australian private equity scene is a vibrant and dynamic space, offering multiple opportunities for growth and value creation for both businesses and investors.
Australia's Investment Landscape
Australia has experienced significant growth in the private equity market in recent years.
The assets under management (AUM) for Australia-focused private capital reached $118 billion in September 2022, marking a 21% increase from $98 billion just nine months prior.
This growth is primarily attributed to foreign investment, driven by Australia's stable economic conditions, strong business environment, and increasing opportunities in various sectors.
One major driver of the increase in private equity investment is the expanding range of investment opportunities.
Industry assets under management reached a record $90 billion in June 2021, up 11% from $81 billion in December 2020, and 42% higher than $64 billion in December 2019.
This is mainly due to Australian businesses seeking alternative finance sources and the shift in investment focus towards industries with high growth potential such as healthcare, technology, and renewable energy.
Environmental, social, and corporate governance (ESG) risks are playing a crucial role in the private equity landscape in Australia.
Investors are increasingly emphasising the integration of ESG factors in their investment decision-making process, and as a consequence, businesses with strong ESG practices are attracting more deals.
This shift in focus is not only creating new investment opportunities but also driving businesses to incorporate sustainable and responsible practices in their operations.
The private equity market in Australia also contributes significantly to the nation's economy, with an estimated annual turnover of $63.5 billion.
This market supports employment for over 512,000 full-time equivalents and adds approximately $58 billion in total value to the Australian economy.
The strong performance of private equity investments enhances the competitiveness of Australian businesses and very likely fuels further growth of the private capital market.
Australia's investment landscape is currently being shaped by the ongoing pandemic, climate change action, and higher inflation.
These forces are driving a shift in investment preferences from traditional sectors such as fossil fuels and office retail towards emerging opportunities in logistics, transition finance, and growth industries with sustainable practices.
This changing landscape requires investors and businesses in the private equity market to continuously adapt and seize new opportunities to thrive.
Role of Private Equity
In the Australian market, private equity plays a significant role in providing investment capital to companies looking for growth and long-term value creation.
This type of capital comes from high net worth individuals, institutional funds, or equity firms, which invest in both private and publicly listed companies with the aim of attaining control and pursuing operational strategy to generate positive returns on the investment.
Private equity firms in Australia manage an estimated $63.5 billion annually, making a considerable contribution of around $58 billion in total value added to the economy, along with employment for 512,000 full-time equivalents.
Recent years have seen a growth in private equity-backed buyout deals, reaching a record of AUD 20.1 billion, a 32% increase year-on-year, and 20% higher than in 2019.
Portfolio companies are the primary target of private equity investments.
These companies benefit from the influx of capital, strategic expertise, and vast network of industry connections provided by the private equity firms.
In turn, the firms work closely with the management teams of these companies to develop and implement strategies that drive long-term growth and enhance overall efficiency.
One of the key aspects of the private equity approach is its commitment to long-term growth.
Unlike traditional short-term focused investors, private equity investors remain focused on a company's growth prospects and operational improvements over several years.
This long-term perspective enables them to make informed decisions that can create lasting value for both the portfolio companies and the investors themselves.
Overall, the role of private equity in Australia is crucial in nurturing the growth of businesses and the economy as a whole.
With the aim of delivering long-term value creation, private equity firms provide access to both capital and strategic expertise, supporting businesses on their journey towards becoming strong and sustainable entities in their respective industries.
Private Equity Australia Guide
Key Sectors for Investment
In recent years, the private equity landscape in Australia has experienced rapid growth and diversification. Among the key sectors attracting significant investment, five industries stand out: healthcare, real estate, technology, infrastructure, and consumer.
The healthcare sector has been a significant focus for private equity investments in Australia, driven by a stable regulatory environment, an ageing population, and increased demand for medical services and technologies. T
his sector presents various opportunities for investment, ranging from medical devices and pharmaceuticals to aged care facilities and diagnostic services.
Examples of successful private equity transactions in this space include the acquisition of iNova Pharmaceuticals and the growth in primary care providers.
Real estate investments have also garnered interest from private equity firms in Australia, with a focus on commercial, residential, and industrial properties. The attraction to this sector lies in the country's strong economy, population growth, and increasing urbanisation.
Investors have been particularly active in acquiring office buildings, retail centres, and logistic assets, capitalising on positive market trends and creating additional value through active asset management and redevelopment.
In the technology sector, Australia has been experiencing a surge in venture capital investments, focusing on innovative start-ups and high-growth technology companies.
Particular attention has been given to fintech, edtech, e-commerce, and software-as-a-service (SaaS) industries, with private equity firms actively pursuing deals and partnerships.
The rapid growth in the technology space has been supported by favourable government initiatives, as well as a highly skilled workforce and a strong desire for digital transformation across businesses.
Infrastructure investment is another core area for private equity in Australia, with a focus on transport, energy, and utilities assets.
Infrastructure projects have been bolstered by the government's substantial spending on building essential infrastructure, aimed at promoting economic growth and increased connectivity.
Private equity has played a critical role in funding and partnering with various organisations involved in infrastructure projects, including public-private partnerships (PPPs).
Lastly, the consumer sector has seen considerable interest from private equity investors, targeting businesses in industries such as retail, food and beverage, and consumer goods.
The consumer market offers significant potential for growth and consolidation, as well as opportunities for operational improvements, strategic acquisitions, and digital integrations.
In conclusion, these five sectors have showcased the potential for robust private equity investment opportunities in Australia.
Their competitive landscape, favourable market conditions, and strong growth potential make them attractive avenues for private equity firms looking to deploy their capital.
By focusing on these key industries, private equity firms can capitalise on the various opportunities that Australia's diverse and thriving market has to offer.
Top Private Equity Firms Australia
Significant Private Equity Deals
In recent years, Australia has seen a surge in private equity activity, with numerous significant deals taking place. One noteworthy transaction involved the Sydney Airport, acquired for $23.6 billion by the Sydney Aviation Alliance.
Another remarkable deal was the $3.4 billion acquisition of Uniti Group Limited by HRL Morrison & Co, Brookfield Asset Management, and Commonwealth Superannuation Corporation.
Pacific Equity Partners also played a crucial role in these transactions.
Private equity-backed mergers and acquisitions (M&A) targeting Australian companies have reached a record $40.1 billion in the first five months of the year, demonstrating the sector's impressive growth.
The increase in M&A activity is largely due to the deployment of private equity dry powder, along with a substantial amount of Australia's super funds.
One of the most publicised private equity deals in Australia involved Virgin Australia and Bain Capital. In 2020, following the airline's financial struggles due to the COVID-19 pandemic, Bain Capital acquired Virgin Australia.
The acquisition aimed to simplify the airline's operations and further enhance its competitiveness in the market.
The strong private equity activity in Australia is generating a positive outlook for the sector, with increased fundraising and returns observed.
The vigorous market signals a promising future for private equity investors and Australian businesses seeking capital for growth and expansion.
Private Equity versus Venture Capital
In the Australian financial landscape, both private equity and venture capital play crucial roles in providing funding for businesses.
While these terms are related, it is essential to understand the fundamental differences between the two investment strategies.
Private equity is a type of investment that focuses on providing capital to established, mature companies in exchange for a portion of the ownership.
Investors in private equity firms often pool their resources to support these businesses, which may need funding for various reasons, such as expansion, restructuring, or improving operational efficiency.
Typically, private equity investments are made with a medium- to long-term horizon, as these businesses are expected to generate returns over several years.
On the other hand, venture capital targets startups and young businesses that may not have established revenue streams nor product-market fit.
These businesses are often in their seed or early-stage phase, with founders and CEOs aiming to attract investors by presenting a minimal viable product or proof of concept.
Venture capital firms usually categorise their investments into rounds such as Seed, Series A, Series B, and so on, and each round involves a higher degree of risk and potential reward.
It is crucial to note that venture capital is considered a type of private equity, as both investment strategies focus on investing in privately held companies.
Both private equity and venture capital have a significant presence in Australia, with approximately $30.3 billion of capital raised to date.
The Australian Investment Council provides industry updates and insights into the performance of Australian private equity and venture capital firms.
While these two investment strategies appear similar, they differ in terms of risk, returns, and investment goals.
Private equity typically seeks steady, predictable returns through mature businesses, whereas venture capital aims to identify high-growth companies with the potential to generate substantial returns, albeit with more significant risks involved.
Trust is an important factor for both private equity and venture capital investments. Investors need to have confidence in the management and decision-making abilities of the CEOs and founders they support.
Both investors and investee companies rely on trust to ensure mutually beneficial relationships that lead to successful outcomes.
In conclusion, private equity and venture capital are distinct yet related investment strategies within the Australian financial landscape.
By understanding the unique characteristics and goals of each approach, investors can make informed decisions to achieve the best possible outcomes.
Effect of Geopolitical Tensions and Covid-19 Pandemic
The Covid-19 pandemic has had far-reaching implications on various industries across the globe, including the Australian private equity market.
The immediate effects of the pandemic include lower returns from short-term securities investments and difficulties in further reducing deposit rates due to already low levels .
Alongside these immediate consequences, a longer-term issue emerging is the likely rise in bad debts, which may impact bank capital and affect the private equity landscape.
Geopolitical tensions, particularly the strained relations between Australia and China, have also played a role in shaping the private equity environment.
The interruption of international student flows, coupled with growing tensions in the Indo-Pacific region, has contributed to uncertainty in the market .
As a result, risk management emerges as a critical aspect for private equity investors and stakeholders.
In this challenging context, private equity dry powder (unused capital available for investment) in Australia is at historically high levels: as of 30 June 2021, it was at USD $11.5bn, although slightly down from USD $11.8bn at December 2020.
Increased inflows of dry powder can be both an opportunity and a challenge for private equity firms. It presents opportunities for investment, yet also raises concerns about finding suitable deals and managing inflationary pressures in an era of market volatility.
The Covid-19 pandemic has not only affected lives and livelihoods, but it has also triggered civil unrest, heightened economic inequality, and increased geopolitical tensions.
This complex interplay of disruptions adds further layers of intricacy to the Australian private equity market.
Therefore, investors and stakeholders must navigate this environment with heightened awareness of both immediate and long-term consequences.
In summary, the Australian private equity landscape is being shaped by the dual impact of the Covid-19 pandemic and geopolitical tensions.
As the industry grapples with issues such as rising bad debts, inflationary pressures, and the effects of strained international relations, risk management and adaptability will be key factors for success in this evolving market landscape.
Compliance with ESG Requirements
The importance of Environmental, Social, and Governance (ESG) factors in the private equity industry is growing rapidly.
Private equity firms in Australia are increasingly prioritising ESG criteria when making investment decisions, both as a matter of ethical responsibility and to mitigate risks and create value in their portfolios.
A key aspect of ESG compliance within private equity is the development and implementation of an effective ESG strategy.
Firms such as Deloitte Australia offer advisory services that assist businesses and acquisitions in crafting their ESG strategies. This support ensures alignment with industry best practices and regulatory standards.
In addition to developing an overarching ESG strategy, private equity firms in Australia must address specific ESG issues within their investment portfolios.
For instance, they need to demonstrate a commitment to sustainable practices, which encompasses reducing their carbon footprint, sourcing materials ethically and responsibly, and ensuring supply chain sustainability.
Furthermore, a strong focus on social considerations is vital. This includes promoting diversity and inclusion within their workforce, respecting human rights, and engaging with local communities to deliver positive social impacts through their investment decisions.
Effective governance structures play a crucial role in achieving ESG compliance as well.
Private equity firms must adopt transparent reporting practices that demonstrate an understanding of their ESG-related risks, and implement policies and procedures that mitigate them.
Proper due diligence processes, as well as risk management and monitoring systems, should be in place to ensure ESG objectives are being met and are closely aligned with corporate goals.
Recent reports, such as EY's article on harnessing the ESG premium, reflect the growing trend for private equity firms to capitalise on ESG value creation.
By adopting responsible investing practices, these firms can enhance their brand reputation, attract more capital, and ultimately drive business success.
Overall, private equity firms in Australia must actively engage with ESG issues to ensure compliance and navigate the evolving landscape of ESG requirements.
By emphasising sustainable practices, prioritising social considerations, and strengthening governance structures, these firms can successfully integrate ESG into their investment strategies and deliver long-term value to their stakeholders.
Top Private Equity Firms Australia
Fundraising and Valuation Trends
In recent years, the Australian private equity (PE) market has witnessed robust growth, benefiting from strong fundraising conditions and high valuations.
According to the BDO's 'Private Equity in Perspective' Report 2021, fundraising has reached historic highs, driven by robust investor interest, multifaceted financing options, and readily available debt financing.
Valuations in the market have remained elevated due to increased competition among investors, as well as the presence of more cash-rich PE firms with significant cash reserves.
This abundance of available capital allows firms to price deals more aggressively, leading to higher valuations for businesses that are attractive acquisition targets.
As a result, some investors may need to adopt more disciplined approaches to investment valuations, pursuing only those deals that align with their core competencies and value creation strategies.
In terms of returns, the Private Equity in Review 2021 report highlights that PE returns are performing well. High-quality assets coupled with strategic value creation plans have contributed to competitive performance across the PE sector.
The trend of consistently strong returns has made the Australian PE market an attractive destination for investors seeking stable, long-term yield.
Moving forward, some of the key takeaways for the Australian private equity market in 2023 include:
Continued strong fundraising and high valuations will likely sustain the competitive landscape among investors.
The trend of robust investor interest in PE funds will likely further contribute to the growth of the market.
As valuations remain elevated, investors will need to focus on deal structuring and value creation to achieve attractive returns.
In conclusion, the Australian PE market has been experiencing favourable conditions in areas such as fundraising, valuations, and returns.
With the continuing trends of abundant capital, elevated valuations, and strong investor interest, the market is set to remain vibrant and highly competitive in the coming years.
Top Private Equity Firms Australia
Evolution and Future of Private Equity in Australia
The Australian private equity landscape has undergone significant transformations in recent years, adapting to various emerging trends to tap into new investment opportunities.
One noticeable change is the growing focus on infrastructure assets, with the top five deals in FY21 accounting for 66% of the total deal value in the sector source.
Furthermore, the market saw year-on-year growth, with deal volume rising from 124 in FY20 to 134 in FY21.
Digitisation is playing a critical role in shaping the future of private equity in Australia, as firms utilise technology to enhance operations, streamline processes, and identify lucrative investment opportunities.
Embracing digital advancements not only improves the efficiency of deal-making but can also accelerate the growth and scalability of portfolio companies.
Increased competition within the sector has meant that firms need to differentiate themselves to remain successful in the market.
As at June 2023, there was USD 14.8bn of dry powder in the Australian private equity market, reflecting the significant appetite for investment source.
To stay ahead of rivals and secure the most attractive deals, private equity firms must demonstrate value beyond the provision of capital, providing strategic guidance and support to businesses to optimise performance.
In light of the current market dynamics, expert advisors are becoming increasingly important for private equity firms. Employing the right advisors can significantly impact deal sourcing, due diligence, and portfolio management.
With the average age of the Australian population rising, healthcare has emerged as a popular sector for private equity investments. Over the last 12 months, the sector saw an increase in investment value from 6% to 10% source.
Given the evolving nature of the Australian private equity landscape, it is essential for firms to stay informed, continuously adapt, and strategically position themselves to capitalise on emerging trends.
Confidently navigating digitisation, facing increased competition, collaborating with expert advisors, and considering the impact of demographic shifts will be fundamental to securing success in the market.
Footnotes
Private Equity in Australia | Top Firms List - WallStreetMojo
Broadening horizons: The changing face of Australian private equity
Private Equity Pulse: Five takeaways from Q3 2023 | EY Australia
Australia's top 25 private capital dealmakers - Financial Review
https://www.preqin.com/campaign/australian-private-capital-market
https://www.bdo.com.au/en-au/insights/private-equity/three-private-equity-predictions-for-fy24
https://banksgroup.com.au/analysis-of-the-australian-private-equity-market/ ↩
https://www.blackrock.com/institutions/en-au/insights/australia-private-market-landscape
COVID-19, geopolitics and risk management: Towards framing a reciprocal... ↩
A rolling disruption: COVID-19's implications for private equity and... ↩
Private Equity Australia Guide - Frequently Asked Questions
What are the top private equity firms in Australia?
There are numerous well-established private equity firms operating in Australia. Some notable players in the market include Pacific Equity Partners, Quadrant Private Equity, and CHAMP Ventures. These firms are known for their successful investment portfolios and significant contributions to the growth of the Australian economy.
What are the latest trends in Australian private equity for 2023?
In recent years, the Australian private equity market has experienced a significant growth, with the aggregate total deal value reaching a record AUD20.1 billion in 2021, up 32% year-on-year and 20% higher than 2019 figures source.
Some of the factors driving this trend include increased interest from global investors, continued expansion of local private equity firms, and increasing regulatory complexity, such as the doubling of filing fees for foreign investment applications.
How can I enter the private equity field in Australia?
To enter the private equity industry in Australia, one typically needs to have a strong educational background in finance, business, or a related field. Subsequent experiences in investment banking, management consulting, or corporate development are often seen as highly valuable.
Networking and relationship-building are critical factors in securing a position within the private equity field. Additionally, some private equity firms offer internships and graduate programmes to provide experience and practical knowledge to aspiring professionals.
Which sectors do Australian private equity firms typically invest in?
Australian private equity firms invest in a wide range of sectors across the economy. Areas that have seen significant interest include healthcare, consumer products, manufacturing, technology, and services.
The investment decisions often depend on market conditions and trends, as well as the specific focus of each private equity firm and their strategic objectives.
What is the average salary for private equity professionals in Australia?
The average salary for private equity professionals in Australia can vary significantly depending on the position, experience levels, and the size of the firm.
Entry-level roles can expect to receive salaries starting from AUD70,000 per annum, with more experienced professionals earning substantially higher rates, depending on the role and position within the organization.
Senior management roles and partner positions can attract compensation well into the hundreds of thousands or even millions of dollars, often inclusive of performance-based bonuses and incentives tied to the success of their investments.
Is a high net worth required to invest in private equity in Australia?
Investing in private equity in Australia typically requires a significant level of capital and is often reserved for high net worth individuals, institutional investors, and large-scale asset management firms.
Though the specific minimum investment amounts may vary between different private equity funds, it is generally understood that private equity investments are less accessible to retail investors due to their high capital commitments, lock-up periods, and higher risk profiles compared to more traditional investment options.
What are the largest private equity firms in Australia?
The largest private equity firms in Australia have a significant presence in the market and play a major role in the country's economic growth.
Some of the key players include Quadrant Private Equity, KKR Australia, Pacific Equity Partners, and CHAMP Private Equity.
These firms have been involved in numerous high-profile deals, and have consistently demonstrated strong performance and expertise in various sectors.
Which software-focused private equity firms operate in Australia?
Although Australia has a growing tech sector, there are only a few private equity firms that specifically focus on software investments in the country.
Notable examples include Telstra Ventures, Square Peg Capital, and Carthona Capital. These firms have invested in innovative software companies and technology start-ups, providing valuable support, and fostering the growth of Australia's software industry.
What is Quadrant Private Equity's role in the Australian market?
Quadrant Private Equity is a leading Australian private equity firm, with a strong track record of successful investments in diverse sectors.
The firm has played a significant role in the Australian market by investing in high-growth companies and supporting their expansion, both domestically and internationally.
Quadrant's agile investment approach and deep sector expertise have contributed to its strong performance and impressive portfolio.
Are there notable small private equity firms in Australia?
Yes, there are several smaller private equity firms in Australia that have carved out a niche for themselves within certain sectors or in specific regions.
These firms typically focus on small to medium-sized businesses and help them grow by providing capital and strategic guidance.
Some examples of such firms include Crescent Capital Partners, Advent Partners, and Next Capital. Their focused approach enables them to better identify and capitalise on promising investment opportunities in the market.
How does KKR Australia compare to other private equity firms?
KKR Australia is a subsidiary of the global investment firm KKR & Co., which has a well-established presence in the Australian market.
While KKR Australia shares the same investment philosophy and global resources as its parent company, it tailors its strategies to suit the unique dynamics of the Australian market.
KKR Australia has made various highly successful investments across different sectors, including healthcare, infrastructure, and consumer goods.
This versatile firm is considered to be one of the top private equity firms in Australia, known for its disciplined approach and goal-oriented investment strategies.
What is the growth of equity in Australia?
The growth of the private equity industry in Australia has been influenced by various factors, such as economic conditions and government regulations.
In recent years, the industry has witnessed strong growth, driven by increasing demand for alternative investment options and growing market opportunities.
According to a market analysis on private equity in Australia, the market size, trends, and forecasts for 2023-2028 indicate continued growth and expansion potential for the sector.
However, the actual growth trajectory will be determined by various evolving factors, including economic trends, evolving market dynamics, and regulatory frameworks.
Top Private Equity Firms Australia - Private Equity Australia Guide
