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September Newsletter
15/09/2011
Dear AVCAL Colleague,

AVCAL launched the Code of Private Equity Governance last week at an event attended by Assistant Treasurer and Minisiter for Financial Services and Superannuation Bill Shorten.

The Minister commended our industry for not just producing and publishing the code, but for its broader role in the national economy. "The Government believes private equity is a key driver of the economy ... and we welcome its important contribution to productivity, innovation and growth," he said.

The launch concluded with a discussion about the broader role of the governance code, which will be an evolving guide that can adapt to and reflect changing circumstances and industry practices. AVCAL is indebted to Blake Dawson, especially David McManus, Carly White and Elizabeth Johnstone for their substantial work on the code and for hosting the launch.

As part of AVCAL's strategy to generate a better understanding of our industry, we are hosting an 'Introduction to private equity and venture capital' seminar on 3 November in Canberra to be hosted by Mallesons. We have over 20 representatives from Treasury, the Department of Innovation, Industry and Science and the Department of Resources, Energy and Tourism attending.

The AVCAL Council has endorsed an enhanced professional development program, which is currently being developed, to commence in 2012. The new program groups the content of our courses into three categories: introductory, focus and masterclass. One of the new masterclass level programs will be a deal simulation exercise"PE - doing the deal" to give industry participants a deeper level of understanding of the mechanics of a deal using a real case study.

We have just completed membership renewals for the year. I would like to express gratitude to our Members for their on-going support. AVCAL achieves a lot as a small industry organisation and this was evident recently when a senior US-based fund head applauded AVCAL for our "best of breed" research.

Next week is conference week and I look forward to seeing many of you there. Delegates will receive a final update tomorrow. For those of you who need to contact us next week, please bear with us as we might be a bit slow in responding to calls.


Kind Regards


Katherine
Chief Executive
AVCAL 2011
AVCAL Conference 2011, Gold Coast
Golf 20 September, still places available.
Conference 21-22 September.
More information here

New networking and professional development opportunities
Formal registration for the following events will open after conference, but please register your interest and mark in your diaries in the meantime.

NSW End of Year Function and AGM, 24 Nov. Register interest

QLD End of Year Function, 30 Nov. Register interest

VIC End of Year Function, 7 Dec. Register interest

PE - Doing the Deal, December TBA. Register interest


R&D tax briefing breakfast
PwC, with AVCAL support, invites you to an interactive briefing on key aspects of the newly passed R&D legislation that impacts investments by venture capital and private equity firms.

Topics covered will include strategies you should consider to obtain the optimal level of cash rebates, due diligence considerations for new investments, the impact of "control tests" on the structuring of future investments, and potential for benefits from collaboration with universities and other research based organisations.

Date: 5 October 2011
Time: 7.15 am - 9.00 am
Location: PwC, Tower 2
201 Sussex Street
Darling Park, Sydney
RSVP: Olivia Salimbeni
Email: mailto:olivia.salimbeni@au.pwc.com?subject=R and D Tax briefing RSVP
Phone: 02 8266 0479
Industry News

Tax determination
The ATO released on 17 August TD 2011/21: Income tax - does it follow merely from the fact that an investment has been made by a trustee that any gain or loss from the investment will be on capital account? This is different from last year's TD2010/21. It provides examples that are meant to help investors and says the answer to the question is no. "The mere fact that a gain or loss from an investment is made by an entity in its capacity as trustee of a trust is not conclusive as to whether the gain or loss is on revenue or capital account for tax purposes." More

The logic of funds flow
After languishing since the global financial crisis, a revitalised private equity sector has recently begun putting smiles on the faces of investors, fund managers, and consultants alike, according to a just-released global report. Succesful exits are growing, existing funds are being deployed, new funds are being raised, and investor allocations to private equity are inching upward. More

Anacacia Capital fund named a world top performer
A vehicle launched by Australia's Anacacia Capital has been named the top performing fund globally by Pensions and Investments magazine. Anacacia Partnership I, which closed in 2007, was judged to be the outstanding performer out of funds raised between 2006 and 2008, based on data collected by Preqin. More

Recent VC deals in the news
Two recent deals have been in the news. One concerns three VC funds - led by OneVentures, with co-investors Brandon Capital, the Medical Research Commercialisation Fund (MRCF) - injecting $15m into Australia's newest biotechnology start-up, Vaxxas and its needle-free vaccine delivery system, Nanopatch. The other concerns the divestment by Starfish Ventures of Energy Response, an energy management solutions company. More

Australian private equity and venture capital continue to outperform public equities
Continuing the trend seen over the last three quarters, the Cambridge Associates LLC Australia Private Equity and Venture Capital Index outperformed the S&P/ASX 300 Index over the one-, three- and five-year horizons as of the quarter ended March 31, 2011, with annualized returns of 7.7%, 1.5% and 4.8% respectively. More

Australian venture capital funds invest in drug development company Spinifex
Spinifex Pharmaceuticals, an Australian pain drug development company, has secured a further A$6.25m of venture capital investment from GBS Venture Partners Limited, Brandon Capital Partners Pty Limited, Symbiosis and Uniseed, adding to the previous A$12m raised from the same syndicate in the first part of its Series B round. More

Kaplan: PE outperformed in most years
The University of Chicago professor and noted private equity performance expert, Steven Kaplan, says forthcoming research will likely bolster evidence that the private equity asset class has beaten the public markets "for a long period of time". Private equity as on average has likely "outperformed the public markets, net of fees, in most years and for a long period of time." More

Aon M&A Solutions appointment
Aon has appointed mergers and acquisitions (M&A) insurance specialist Jennifer Richards to lead the Transaction Liability division of the Aon M&A Solutions team. She will assume the role of Regional Director Transactional Liability. jennifer.richards@aon.com
R&D tax incentive
This week the ATO and AusIndustry released guidance on the new R&D tax incentive. AusIndustry has produced an R&D Tax Incentive Overview, FAQs and Fact Sheets among other material. More
On the expenditure side, you can now refer to the ATO R&D Tax Incentive webpage which includes a series of brief discussions on eligibility, registration, claiming and compliance and monitoring. More

George Roberts video
Watch George Roberts at the Private Equity International's PRI Forum. The KKR co-founder discusses KKR's green portfolio programme and approach to ESG issues at PEI's recent Responsible Investment Forum in New York. To view the full video, you need to register for free to www.privateequityinternational.com, and then simply click here.

Send us your news!
We're keen to ensure our readers can stay up to date with the latest developments. If you are a GP, send us news on your latest activities and achievements.

Media Watch

"As a growing and dynamic part of Australia's financial services industry, I am keen to see private equity continue to improve Australia's overall productivity and strengthen Australia as a financial services centre," said Assistant Treasurer Bill Shorten.
Investor Daily
More

"The level of professionalism in Australian superannuation is very high and there is a real interest in ESG [environmental, social and corporate governance] issues," said David Brown, AVCAL Council member and former VFMC head of private equity, in an interview about the new governance code.
Australian Financial Review

"A new code of governance for the venture capital industry should inspire more confidence among investors keen to put their money into promising early-stage companies."
StartupSmart
More

"Private equity has a bad name and many may decry the recent $1.2 billion deal done by private equity company Archer Capital, which sold out its stake in accounting software company MYOB and more than doubled its money. I'm not one. This is private equity at its best," wrote journalist Kath Walters.
AFR/BRW

"It's a shame that short term regulatory issues around superannuation are restraining long-term investment decisions, which will ultimately bear on returns for super funds in the long-term," says Joseph Skrzynski CHAMP Private Equity Founding Partner. "Australian super funds are out of step with their peers overseas with this part of their asset allocation to long-term investments."
Investment and Technology News
More

"Australia's private equities continue to outperform public"
Asian Venture Capital Journal
Other Events and Offers

AVCJ HK Forum
Some of the world's top private equity and venture capital professionals will gather in Hong Kong from 7 - 11 November at the 24th Annual AVCJ HK Forum. For more information visit www.avcjforum.com, email mailto:Anil.Nathani@incisivemedia.com?subject=Query from AVCAL newsletter or telephone Anil Nathani on + 852 3411 4938.

NZVCA 2011 Annual Conference - 27 October
The annual private capital event is where you can catch up with industry leaders and the latest trends in private equity and venture capital in NZ. A one-day conference with plenary and break-out sessions, including conference cocktails and dinner.

AsiaD: All Things Digital
AsiaD: All Things Digital, a Wall Street Journal Executive Conference, will be held in Hong Kong on October 19-21. AVCAL members will enjoy a special rate to attend - valid until 23rd September. Please email mailto:bonnie.cheng@dowjones.com?subject=AsiaD query from AVCAL newsletter to find out more.

Australia US Investor Conference
Cappello Capital will host an inaugural annual Investor Conference on 12 January 2012 in Los Angeles. More than 150 investors and 50 Australian presenting companies will be in attendance.

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.
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.

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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