AVCAL statement in response to initiation of Senate Inquiry into collapse of listed retailers in Australia
The decision yesterday in the Federal Parliament to initiate a Senate Economics References Committee inquiry into the collapse of listed retailers provides a unique opportunity for the community to better understand the important role that private equity plays within our economy, says the Australian Private Equity and Venture Capital Association (AVCAL).
“Private equity contributes capital to Australian businesses across a broad spectrum of industries in our economy. These range from small family businesses, to large enterprises looking to restructure and expand,” said AVCAL's Chief Executive, Yasser El-Ansary.
“Some of the best performing businesses in Australia – many of which are listed – have benefited from private equity investment. This fact is supported by data that confirms private equity-backed initial public offerings have comprised 8 of the top 10 post-IPO performers since 2013.1”
“AVCAL will be putting forward a compelling base of evidence supporting the significant value our industry delivers to the economy, as well as the millions of Australian superannuation fund members across the community who benefit from a strong and well-functioning private equity industry,” said Mr El-Ansary.
“A comprehensive Senate Inquiry in 2007 into private equity investment in Australia recognised the important role that our industry plays in improving the efficiency of businesses and the capital markets.”
The final report of the Inquiry reached the following conclusion:
“The committee believes it is important to continue to attract foreign investment into Australia and does not accept the narrowly held view that some sectors of the national economy should be protected from private equity activity. The committee views private equity as an opportunity to reinvigorate underperforming public companies, which will subsequently benefit Australian consumers, shareholders and workers.”
“AVCAL is looking forward to the opportunity to actively participate in the Senate Committee’s inquiry into the role of private equity firms within corporate takeovers. We believe that it is important for the community to understand the importance to our superannuation system of a strong and well-functioning private equity industry,” said Mr El-Ansary.
“There's an information gap that sometimes exists around the role of private equity in our economy, and this inquiry will create the chance for us to explain and showcase the hundreds of Australian businesses that have benefited from private equity investment over recent years.”
1 For all IPOs with an offer size of at least $100m, as at 31 December 2015
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