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December 2009
Dear AVCAL Colleague

We have been communicating for some time with members in relation to the tax treatment of investment gains.

I wanted to take this opportunity to let our stakeholders know that our recent activities around tax reform have included liaising with the Australian Financial Centre Forum, Board of Taxation and key stakeholder groups including relevant industry associations. We have had an active dialogue with the Government in relation to these, including the Treasurer and the Assistant Treasurer. We have also sent submissions to the AFCF, Board of Taxation and Henry Committee. Please see our media statement yesterday in response to the ATO draft determinations calling for the Federal government to urgently develop legislation to restore international investor confidence in Australia. Our submissions on the matter are available via the AVCAL website.

Several weeks ago a large group of investor members of AVCAL met to determine the industry response to the recent ATO action. Responsibility for the ongoing dialogue is being led by AVCAL's Legal and Tax Working Group, chaired by our AVCAL Chairman Andrew Rothery. A specialist communications team have been appointed to support AVCAL in both Government affairs and media management. Investor members were given an opportunity to be more fully briefed at a webinar and information session held on 9 December in Sydney.

I would ask AVCAL members to contact me directly should they wish to discuss the approach.
We have had a rather interesting year despite the global financial crisis. The mood seems to have lifted somewhat recently with lots of activity around the traps.

Our VC members have been very actively involved throughout 2009 in the VC Working Group and in a series of Round Table events that have articulated the need for increased support for venture in Australia. These efforts led to meetings this year with the Treasurer, Wayne Swan and the Minister for IISR, Kim Carr.

2009 was significant in terms of developing our Research team and getting on with the collection of data through our new electronic PEREPS platform. This was a success with higher levels of compliance being achieved than ever before. Of course we could still do better, the recent activity around tax has strongly highlighted the need for comprehensive and complete data on the industry.

Publications this year included,

- Value Capital - the evolution of VC and PE in Australia
- AVCAL Yearbook 2009 - an activity report
- Thomson/AVCAL 2009 Australian PE and performance measurement report
- AVCAL Deal Metrics Survey 2005- 2008
- Cleantech, PE and VC Fact Sheets

Our conference this year was a highlight with an increased sense of satisfaction of participants and partners being reported across the board.

Mark your diaries for 22 and 23 September 2010 on the Gold Coast. Golf will be 21 September.

For AVCAL 2010 we have confirmed Bernard Salt, KPMG Partner and Australia's renowned demographer to headline the program and Bill Evans from Westpac is confirmed again to give his annual global economic forecast which is always met with such great enthusiasm.

We are also looking at a complete re-working of AVCAL member engagement events in 2010. You should see some initiatives and improvements on this front as the calendar takes shape over the next few weeks.

I would like to thank my team, the Council, the Working Groups, industry practitioners and our partners who have generously assisted us with time and financial support to enable the work we do for the industry.

There are also some silent achievers at AVCAL, three small businesses that provide us with our most visible forms of member engagement, Respublica, our media and government affairs partner, The Forum Group who coordinate our AVCAL Conference every year, and PointSize who have provided us with brand strategy and helped us build AVCAL as a living entity not just a logo. Thanks to them all.

The AVCAL team wish you and your families, a very safe and happy festive season. We trust that 2010 will provide us with more challenge, innovation and success.

Regards



Katherine Woodthorpe
Chief Executive

Latest Policy and Research News

The latest mergermarket Private Equity alert

Draft Legislation on Tax Treatment of Managed Investment Trusts Disposals

Assistant Treasurer Nick Sherry released the Rudd Government's draft on the taxation of capital gains and loses of Managed Investment Trust disposals. This comes after ongoing lobbying efforts by AVCAL to obtain clarity on the matter. The deadline for public comment on the draft and the accompanying explanatory material is the 24th of December, 2009. The Government aims to introduce the Bill by early 2010

Click here to view past AVCAL submissions

Article by AVCAL Chairman Andrew Rothery in the AFR

A recent article written by AVCAL Chairman Andrew Rothery and published in the AFR clears up some of the myths and stereotypes around the Australian private equity industry. The article also talks about the growth strategies used by private equity firms and the current state of the industry.

Private Equity Performance Report Fund Data as of Q2 2009

The recently released performance report by Preqin analyses private equity partnerships as at 30 June 2009. As compared to the previous Preqin performance report ending March 2009, there is evidence of a slight improvement in the 'All PE' horizon IRRs for 1 and 5 years. Moreover, 'All PE' 1, 3, and 5 year horizon IRRs shows better performance relative to the S&P 500 and MSCI Europe Horizon IRRs

Australia: 4th most attractive country for VC and PE investment

Australia is the 4th most attractive country for investors in VC and PE, according to the 2009/2010 Global VC and PE Country Attractiveness Index just released by IESE and sponsored by Ernst & Young

Commercialisation Australia

The launch of Commercialisation Australia in January 2010 is a new funding approach by the Australian Government where the program will be tailored to each application rather than customising the application to fit the program. Read here

$40m Yuuwa Capital fund to assist WA start-ups

The $40m Yuuwa Capital fund based in Western Australia will be made-up of $20m from the Commonwealth (Innovation Investment Fund) and $20m from private sources. The fund will target innovative start-ups in the life science and ICT sectors based in WA. The fund aims to work with research organisations, industry networks and West Australian universities to generate investment opportunities.

Other Events

National Growth Summit'10 - Going Global, Getting Lean, Sydney Convention Centre, 17- 18 February 2010. Australia's leading executive event for entrepreneurs and leaders of growing companies. AVCAL members receive $200 off with promo code AVCAL and a further $100 off if you register before 18 December 2009.

6th AustralAsian Cleantech Forum 2010, 22-24 March 2010, Crown Conference Centre, Melbourne. Register here
The 7th annual Australia & New Zealand AVCJ Private Equity & Venture Forum, 3-5 March 2010, The Westin Sydney. As an extension of its past six highly successful forums, it is already regarded as the meeting place by the industry experts across the region. Register now.

AAAI 2010 National Angels Conference, Stamford Grand, Glenelg, Adelaide 17-19 February, 2010.
Meet Angel investors and innovation experts from across Australia and around the world. Register now

Australian Investment Network
The Australian Investment Network is holding its first Speed Pitching events in Sydney and Melbourne in March 2010. Please write to Dr. Tania Peitzker if you'd like to experience this successful, Dragons Den inspired format for meeting entrepreneurs in a face-to-face, exclusive environment.

"Open for Business" New Zealand-Australia Investment Forum, 10 and 11 March 2010, Hyatt Regency Auckland, New Zealand. For more information click here.




AVCAL 2009 PARTNERS

AON

Archer Capital

BOS International

Castle Harlan

CATALYST

Coller Capital

Champ Private Equity

CM Capital

Credit Suisse

GE Commercial Finance

Intralinks

Ironbridge

INVESTEC

KKR

LEK

Maddocks

NAVIS

Next Capital

NBC Capital

Pacific Road Capital Management

Pacific Equity Partners

Propel Investments

Quadrant

RMB Capital Partners

ROTHSCHILD

Westpac


RESEARCH PARTNER

Ernst & Young


REGIONAL PARTNER

Gallagher

Disclaimer:

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

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