29 October 2019

Statement in relation to proposed recent initial public offerings in Australia

Statement issued by Yasser El-Ansary, Chief Executive of the Australian Investment Council

SYDNEY: Over recent weeks there has been considerable media interest in decisions taken by some private equity firms not to proceed with public offerings of equity in businesses currently held within their investment portfolios.

Decisions taken in respect of the equity market listings of specific businesses are made on the basis of individual factors relevant to each business.

It is neither warranted, nor justifiable, to make broad-ranging and unsubstantiated claims about the quality of private equity-sponsored equity market listings in Australia on the basis of the unique market factors relevant to each separate business.

Any attempt to make such broad-ranging conclusions is, in my view, a deliberate attempt to misinform the market and damage the reputation of Australia’s world-class A$30bn private equity industry.

Long-term independent analysis of market performance by leading global market insights firm, Cambridge Associates, confirms that as an asset class, private equity continues to deliver outstanding above-market performance to its institutional investors, including superannuation and pension funds in Australia and globally. More information about the Cambridge Associates / Australian Investment Council quarterly PEVC performance benchmark can be found at aic.co.

On a regular basis, the Australian Investment Council also partners with leading international financial advisory firm, Rothschild & Co, to produce a comparative performance analysis of the post-listing performance of private equity-sponsored initial public offerings, as against non-private equity-sponsored listings. The consistent outperformance and competitiveness of private equity-sponsored IPOs is evident in the short, medium and long-term measures of post-listing performance. Access to current and prior reports produced by Rothschild & Co and the Australian Investment Council can also be found at aic.co.

It is important for the international competitiveness of Australia’s open market economy that private equity continues to play a significant and prominent role in supporting the growth and expansion of thousands of great businesses across every industry sector of the market. A well-functioning and well-informed public offer market is an important ingredient in maintaining and building Australia’s reputation as an attractive destination for domestic and international investors.

To discuss the private equity industry’s position on initial public offerings, and the broader role that the industry plays in delivering outstanding performance to investors in Australia and around the world, please get in touch with the Australian Investment Council’s chief executive. In the first instance, email communications@aic.co.