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August Newsletter
15/08/2011
Dear AVCAL Colleague,

Next month AVCAL will publish the AVCAL Code of Private Equity Governance.

I am delighted that Assistant Treasurer and Minister for Financial Services and Superannuation, Bill Shorten has agreed to speak at the launch to welcome the new code. The code has been in development for some time and undergone substantial consultation and review. It is part of AVCAL's program of continuous improvement in the standards of the industry.

The governance code joins our suite of guidelines for the industry. These are our Reporting and Valuation guidelines and our AVCAL Code of Conduct. It also reinforces our encouragement of AVCAL members to consider environmental, social and governance issues. A formal governance code now puts the private equity and venture capital industry in Australia at the forefront of world practice in terms of industry standards. I encourage you all to familiarise yourselves with the code after its release on Wednesday 7 September. You can register to attend the AVCAL members-only launch event. We plan to run an ESG Forum in October that will step members through the code in more detail.

AVCAL has been designing an enhanced professional development program, which will commence later this year. The new program groups into three categories the content of our courses: 'introductory' for new industry entrants, 'focus' for those needing a broader understanding and 'masterclass' to give a deeper level of learning. The professional development program is designed to enhance the industry's knowledge, capability and reputation by building skills, experience and understanding. More details about new courses will be released later.

While on the topic of training, we are looking at running our very popular PE101 program in Brisbane, but first want to invite expressions of interest to help determine local appetite. Please reply by email if you and/or your colleagues are interested in attending.

Registrations for the Annual AVCAL Conference, in just over a month's time, are almost at capacity. We do have some places available for conference delegates at the golf event, the day before. I encourage you to take advantage of this networking opportunity and to put a team of four together, or let us arrange that for you. The course at Links Hope Island is world-class.

The conference program has been updated with all of the latest information on sessions and speakers. At the end of the month we will send to conference delegates an up-to-date delegate list along with some important information to make the event smooth and enjoyable. Remember that the conference is a members-only event. We recently sent out a membership invoice reminder. Please make sure payment has been made if it has not been attended to already.

Substitutions are now open for conference delegates. Refunds for cancelled registrations may be issued, less a fee of AUD$170, up until 5pm on Friday, 2nd of September 2011. After this time, no refunds will be granted. Please read the terms and conditions of your registration to ensure you understand the substitution and cancellation requirements.


Kind Regards


Katherine
Chief Executive
Industry News

Scam warning

An innocent entrepreneur got conned recently by a website purporting to make introductions to PE funds looking for investments. The site operators, who seem to be based in Malta, have mirror sites for a range of countries and regions. We have advised our global counterparts, and raised the issue with ASIC. If in doubt aboutt the credibility of a service, ask AVCAL before committing any funds to it.

Performance praised

Private equity attracted a prominent citation recently as a high-performing asset class. Super fund industry consultancy Chant West released its fund-level performance report for financial year to 30 June 2011 which highlights the benefits of investment in private equity.

The company's media release said:

'(Chant West principal Warren) Chant says "Industry funds as a group finished slightly ahead of master trusts because they tend to have lower allocations to un-hedged international shares (16% versus 20% [for retail funds]) and bonds (11% versus 19%) which were among the poorer performing asset sectors. The corollary is that they also have higher allocations to unlisted assets such as private equity, unlisted property and unlisted infrastructure (19% versus 3%), which performed well for them."

The Australian Financial Review said just over a week ago in a story about Victorian Funds Management Corporation that the "top performing asset classes over the 12 months were private equity, which returned about 21 per cent, Australian
equities with 13.5 per cent and international equities with 15.3 per cent".

The AVCAL website has more details about the Chant West report. Industry Super Network also did the media rounds recently explaining the benefits of alternative assets for returns.

Future Fund ups PE holding

In releasing its latest portfolio allocations, the Future Fund's holding of PE assets now stands at 3.9% of its total assets for the last quarter (at $2.896b), up from 3.4% the previous quarter and from 3% a year ago. FF Board of Guardians Chair David Murray said: "The Board remains focussed on prudently building a diverse portfolio that is capable of generating good returns in positive environments but provides some protection in weaker markets."

Innovation

Senator Kim Carr released two weeks ago the Australian Government's latest Australian Innovation System Report. But the report came in for some criticism from the AFR last week in a piece by Peter Roberts, who declared that the report found it was "one step forward and two steps back for business innovation".

PE global ranking

The Global Venture Capital and Private Equity Country Attractiveness Index - 2011 Annual, has Australia maintaining its ranking at 7th position. We were downgraded on taxation but upgraded on other issues including governnance. See here for more details.

Tax Forum

The discussion paper the Government released in the lead-up to its Tax Forum on 4-5 October doesn't look at specific issues directly related to PE and VC, but interesting and potentially relevant macro issues are mostly in the Business Tax stream (Session 3). More details here.
AVCAL events

Governance Code launch
An AVCAL member-only event

AVCAL and Blake Dawson launch the 'AVCAL Code of Private Equity Governance' on Wednesday 7 September in Sydney. Assistant Treasurer and Minister for Financial Services and Superannuation, Bill Shorten will welcome Code.

Where:
Blake Dawson
Level 36
Grosvenor Place
225 George Street
Sydney

When:
2.30pm - 4.00pm, Wednesday
7 September 2011

Register now to secure a place.

Almost full - AVCAL 2011
AVCAL Conference 2011, Gold Coast
Golf 20 September, still places available.
Conference 21-22 September.
More information here.
Latest Research News

AVCAL 2011 Data Collection

Thank you to all GPs who submitted their data for the FY2011 AVCAL data collection round by the deadline of 5 Aug 2011. This data forms the backbone of AVCAL's proprietary database and is the main input into our Yearbook and Deal Metrics Report (to be released in Q4 2011), and in supporting our advocacy and educational efforts.

The AVCAL Research team is currently looking at finalising data processing and analysis by early September. Therefore, GPs who have not yet finalised their submissions are encouraged to do so quickly. GPs can submit their data via our online platform AVCAL PEREP_Analytics. Benefits of submitting your data include:

1. Exclusive access to more detailed industry data
2. Complimentary pass to an industry statistical briefing by AVCAL following completion of the survey
3. Customized research reports by request

Please direct any inquiries to research@avcal.com.au.

Media Watch

These are links to some relevant stories you may not have seen and a list of "quotable" quotes and headlines.

"TPG and the Australian Private Equity and Venture Capital Association would argue that the big winners from the Myer deal included Australian super funds that allocated funds to the TPG Asian fund that bought and sold Myer," wrote Chanticleer's Tony Boyd in listing his five best and five worst PE deals of recent years.
Australian Financial Review

"Don't trade returns for low fees: Chant"
Investment and Technology News

"Life sciences sector shines in Australian PE and VC industry"
Financier Worldwide

"Industry Mulls Structure, Taxation of Collective Investment Vehicles"
Global Custodian

"Australian super funds poor performers after too much concentration on shares"
The Australian

"The Key To Private Equity Returns"
Business Insider

"Private equity anger rises over insurance solvency rules"
Financial News, Dow Jones

Send us your news!
With deal and fundraising activity picking up, we're keen to ensure our readers can stay up to date with the latest developments on this front. If you are a GP, do send us your news releases on your latest activities, or success stories, and we will be happy to post them up on our website and in future newsletters.
Other Events and Offers

Science Based Incubation - 28 November
Technopolicy Network is hosting its 10th annual conference on Science Based Incubation 28-29 November in Auckland, New Zealand.

PE Asia special offer
PE Asia is currently offering AVCAL members a 20% discount for new subscribers. Please email PE Asia for more information about this offer. Ensure you quote AVCAL11 to receive this discount.

AIRG AIC Winter Conference 2011 special offer
AVCAL members will be entitled to discounted registration for this conference, jointly hosted by Australasian Industrial Research Group and the Australian Institute of Commercialisation. It will be held at the Sebel & Citigate King George Square, Brisbane, 29-30 August 2011.
Young Garvan All Ribbons Ball - 20 August
This event is a black-tie dinner to raise funds for the Young Garvan Postdoctoral Fellowship, which enables young scientists to broaden their experience by working on a key research project at the Garvan Institute of Medical Research.

The third annual Tech23 23 August 2011, Sydney
Tech23 2011 is a competition for young, innovative and fast-growing Australian companies. 23 of Australia's best will be given a five-minute timeslot to show off their business model to an audience of 400+ potential investors, mentors, entrepreneurs and customers.

Creative Innovation 2011 conference - 16-18 November
Creative Innovation 2011 is a rare opportunity to learn, think, connect and share ideas with over 35 of the world's most influential thinkers under one roof. Inspire your leadership and achieve business success at the conference from 16-18 November at the Sofitel Melbourne On Collins.

Preqin special offer
Preqin is offering AVCAL members the chance to subscribe to their services at a discounted rate. First-time subscribers will receive a USD 250 discount on any product or publication worth USD 1000 or more.

Capital IQ special offer
Capital IQ is currently offering AVCAL members a 2 month free trial for new subscribers.

mergermarket special offer
mergermarket is offering a free trial to AVCAL members and an additional free 2 month access for any subsequent NEW subscribers to the service (14 months for the price of 12).

Guide to Responsible Investment discount
PEI Media's Guide to Responsible Investment provides practical ESG guidance from over 25 industry experts. AVCAL members receive 15% off, quote AVRI15 to redeem.




RESEARCH PARTNERS

Ernst & Young

Pacific Strategy Partners


AVCAL 2011 PARTNERS

Castle Harlan

Advent

Gallagher

NAVIS

AON

KKR

Ironbridge

CATALYST

Archer Capital

TEST CBA 3

BOS International

Champ Private Equity

Quadrant

INVESTEC

KPMG

Intralinks

Riverside Company

Pacific Road Capital Management

Propel Investments

Credit Suisse

Pacific Equity Partners

LEK

Norton Rose

NBC Capital

Westpac

ROTHSCHILD

McGrathNicol


DATA VENDOR

Capital IQ

Disclaimer:

AVCAL is the professionally managed industry body that promotes the Australian private equity & venture capital industry.

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