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October Newsletter
19/10/2011
Dear AVCAL Colleague,

I have just returned from London, where I met with many of our international counterparts. We meet approximately annually to discuss issues that affect us all globally. This year's discussion included progression of various regulatory regimes such as Dodd Frank in the US and the AIFMD in Europe.

We also discussed the continuing global financial crisis and its impact on our industry. We were all agreed that we need to do more to demonstrate and communicate that in these challenging times, PE is a force for economic good. Often it is the only source of capital for growing companies, it is unpinning jobs in several sectors and it continues to deliver superior returns to pensioners and superannuants around the world, whose savings have been eroded by volatile listed markets.

I also visited EVCA and attended the BVCA conference. It was heartening for AVCAL to be commended as world's best in areas including research as well as our education and support for incorporating ESG principles into investment decisions to deliver increased value.

Back home, AVCAL is busy on a number of fronts.

We've just completed the annual membership subscription cycle. Thank you for your continued support of AVCAL. We will be putting your membership subscription to good use during this financial year, with our continued government advocacy on tax issues and VC support as well as the all-important research to back our assertions about the positive economic impact of our industry.

AVCAL Research is finalising two important publications which are to be released in November: Yearbook 2011 in conjunction with Ernst and Young which will focus on fundraising, investments and divestments; and the 2011 Deal Metrics Survey in conjunction with Pacific Strategy Partners which will drill down into trends in investment metrics over the past year.

Another important piece of work which is also currently underway involves liaising with LPs to better understand investor attitudes to private equity and venture capital. Engaging with LPs is part of a long term goal to generate greater recognition and interaction with investors, particularly superannuation funds and trustees.

GP and LP members may wish to note that, in response to member feedback, we are working together with Cambridge Associates to provide you with exclusive access to preliminary quarterly benchmarks which will be released much sooner after quarter-end, so that they can be used in members' quarterly reporting to investors and trustees.

Our 'Introduction to private equity and venture capital' seminar on 3 November in Canberra, to be hosted by Mallesons, for government agency officers, is fully subscribed. The seminar is part of AVCAL's strategy to generate a better understanding of our industry across all areas of government. A host of other events are being held before the year's end, so I will look forward to seeing you at various venues around the country (see below for details on events currently open).

Thanks also to those of you who responded to the AVCAL 2011 conference evaluation survey. From reports received so far, 2011 lived up to and even exceeded delegate expectations as we continue to raise the bar.

The newsletter contains references and links to important current industry research, news and networking and professional development opportunities. More events will be released for registration over the next week or so. Watch out for the new "PE - Doing the Deal" master class scheduled for December 2011.

Kind Regards


Katherine
Chief Executive
Events

Queensland End of Year Event
Partnered by Deloitte
Includes Viking Rentals case study and drinks
Brisbane 30 Nov 5-7pm
Register now


Other networking and professional development opportunities
Please record your interest via the email links below and mark in your diaries the following events.

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

VIC End of Year Function, 8 Dec (changed from 7 Dec). Includes a case study presentation by Advent Private Capital on their Securepay investment. Partnered by Credit Suisse Register interest

NEW Master Class
PE - Doing the Deal, Sydney, registrations open soon. Held over two half days Dec 6 (11am-5pm) and 7 Dec (9am-networking lunch). Register interest

For your diary - AVCAL Golf Day, 31 May 2012
Concord Golf Course, NSW

For your diary - AVCAL 2012 Conference, 19 and 20 September next year
Research News

AVCAL Research Prizes
Submissions are invited from academia and industry participants for the 2011 AVCAL Research Prizes for best PE and VC papers. This program is aimed at encouraging the development of high-quality research on issues of importance to the PE and VC industry in Australia. Entries close at 5pm (EST) on Friday 9 December 2011 and will be judged by a panel selected by AVCAL.
More details

AVCAL/Capital IQ Market Observations Report 2011 - Australia & New Zealand
The AVCAL/Capital IQ Market Observations report looks at trends and developments in M&A and private placements completed in Australia and New Zealand in FY2011, and the contribution of private equity (PE) to this activity.
Download the report

mergermarket M&A Australia report
mergermarket's Australia Q1-Q3 2011 M&A round-up report reveals that the country saw steady flow of deals in the period with a total of AUD29.9 billion M&A transactions recorded, with inbound deals accounted for 72% of the total deal value.
Download the report

New AVCAL Members

Welcome to the following new AVCAL members. Click on their names for further details.

Allens Arthur Robinson - Corporate

Alphastation Corporate Communications - Small Corporate

Babson Capital - PE $51m-$100m

Campbell Lutyens - Small Corporate

Chartis Insurance - Small Corporate

Citco Fund Services (Australia) - Small Corporate

Credit Industriel et Commercial - Small Corporate

JMD Ross (Equity Risk Partners Global member) - Small Corporate

Miles Advisory - Small Corporate

Nomura Australia Limited - Corporate

Pacific Strategy Partners - Small Corporate

Partners for Growth - PE $51m-$100m

Right Click Capital - Business Angel

Risk Capital Advisors - Small Corporate

Saxon Klein - Small Corporate

St. George Bank Limited - Small Corporate

Vantage Performance Pty Ltd - Small Corporate


Industry News

GBS Ventures completes healthcare fund with global first quartile performance
GBS Ventures has made the final realisation from its 1998 vintage life science venture capital fund. The fund exceeds top quartile performance metrics based on return on invested capital and distributions to paid-in capital, relative to life science funds in its US peer group raised in 1998. The fund delivered investors a premium to the all ordinaries accumulation index, and small ordinaries accumulation index over the period. "This result vindicates our strategy of building world class Australian life science companies to create superior returns for our investors," said Managing Director Brigitte Smith. The Australian Bioscience Trust (ABT) helped to build Australian life sciences success stories such as Pharmaxis, Alchemia and Cogstate.
More

Partners launches global private equity fund
AVCAL member, Partners Group has launched a new global private equity fund based in Sydney, targeting small to medium institutional and retail investors. The Partners Group Global Value Fund offers diverse global private equity exposure, open-ended structure with monthly liquidity, as well as separate classes of units for institutional and individual investors. "Our initial discussions over the past six months have generated strong interest in the fund from high net worth investors, private banks and select dealer groups," said Martin Scott, Head of the Australian Partners Group operations.
More

PE focus by Mallesons
The lastest issue of Mallesons' 'Regulator' newsletter is focussed on PE. There are stories on AVCAL 2011, the AVCAL Code of Private Equity Governance, intercreditor principles for the Australian leveraged finance market, and taxation of foreign PE firms on Australian exits.
Read 'Regulator'

AVCAL 2011 award winners announced
The Australian Private Equity and Venture Capital Association (AVCAL) has announced the winners of its annual awards that recognise outstanding performance in the private equity industry.
More

US VC fundraising lowest in 8 years
"The quarter's low fundraising numbers are reflective of ongoing challenges within the venture capital exit markets," said Mark Heesen, president of the NVCA. "Economic instability continues to impact the ability of venture-backed companies to go public which, in turn, has prevented many venture firms from delivering solid returns to their investors. Until we begin to see a steady and sustainable flow of quality IPOs which return cash, limited partners will remain on the sidelines and the venture industry will continue to contract."
More

Unlocking superannuation
Australian Workers Union published this in relation to the Tax Forum: "Linking superannuation with innovation and infrastructure investment would help compensate for the general shallow depth of Australian capital. The Federal Government should look at ways to unlock the potential of Australian superannuation through infrastructure bonds, social bonds and venture capital funds."
More

Yuuwa Capital invests $1.5m into Agworld
Perth-based venture capital (VC) firm Yuuwa Capital has injected $1.5 million worth of investment into data capture and management player Agworld, which focuses specifically on the agricultural industry.
More

Helmsman Capital invests in Global Red Australia
Helmsman Capital has made an initial investment of $6.7m (total commitment of $9m) in Global Red Australia to increase the capital base of the business and to facilitate its continuing strong growth.
More
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

"In contrast to the disenchantment with venture
capital investing of many Australian institutional
investors, Partners Group senior vice president Jennifer Haas said their venture and growth capital program had shown good returns over recent years and the firm remains committed to investing in the sector. The fact that Australian technology companies were well placed to serve the growing markets of Asia now added to their potential. Australia remains an important fundraising and investment market for Partners Group."
Australian Private Equity and Venture Capital Journal


"Going forward, Australia has the opportunity to link its national savings with innovation and infrastructure investment to address the shallow depth of capital.
Linking superannuation to long-term investments will lead to more stable superannuation returns, reduce the infrastructure deficit, help fund innovation and ensure that innovation supports and bolsters Australian manufacturing," AWU National Secretary Paul Howes said with respect to the Tax Forum and Jobs Forum.
More

'US private equity fund-raising slipped in the third quarter, raising concern that fund-raising is starting to lose momentum. Thanks to a strong start to the year, however, fund-raising is still on pace to top the$95.9 billion raised in 2010. "Private equity fund-raising appeared to be on a steady flight back to the land of recovery during the first half of 2011," said Laura Kreutzer, managing editor of Dow Jones Private Equity Analyst.'
Dow Jones
More

"The economic uncertainty is unlikely to dissipate anytime soon, but an increased appetite for acquisitions from private equity and the narrowing gap between vendor and buyer expectations augers well for small- and medium-sized enterprises, accounting firm Ernst & Young says."
Smart Company.com
More

"A new data-sharing initative with the Institutional Limited Partners Association (ILPA) will facilitate new research into the many 'lingering uncertainties' of the private capital asset classes, said Harvard Business School professor Josh Lerner. Lerner, the Jacob H. Schiff Professor of Investment Banking at Harvard who runs the Private Capital Research Institute (PCRI), said the PCRI/ILPA initiative would help in 'weeding out' bad research and in 'getting to the bottom of the big, feted questions that are out there that remain to be answered'."
Privcap
More
Other Events and Offers

Equity Risk Partners Global - live conference call
AVCAL members are welcome to tune into the "Strategic Applications of Warranty and Indemnity Insurance in the Global Deal Market" 20-minute conference call. Click the above link to register.


AVCJ HK Forum
AVCAL members are entitled to a 10% discount to attend the 24th Annual AVCJ HK Forum in Hong Kong 7-11 November. Click the above link or email Anil.Nathani@incisivemedia.com 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 bonnie.cheng@dowjones.com 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.

Creative Innovation 2011 conference - 10% discount
Use the password 'CONNECT' when booking the conference and receive a 10% discount.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.

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.
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.

The information contained in this e-mail, and any attachments to it, is intended for the use of the addressee and is confidential. If you are not the intended recipient you must not use, disclose, read, forward, copy or retain any of the information. If you have received this e-mail in error, please delete it and notify the sender by return e-mail or telephone. AVCAL does not warrant that any attachments are free from viruses or any other defects. You assume all liability for any loss, damage or other consequences which may arise from opening or using the attachments.