An increasing number of businesses are choosing to raise funds from private capital investors today, rather than through public markets, because of the benefits of partnering with sophisticated investors who can who can bring real value to the execution of business strategies that improve competitiveness and productivity.
The shift towards private capital investment is taking place in most developed markets around the world. Here in Australia, we expect domestic fund managers and institutional investors to continue to grow their activities across the market, as more businesses seek access to smart capital that can help them unlock growth opportunities in the local market, as well as internationally.
$12.5 billion in private equity investment in 2018 with the value of private equity-backed buyouts having increased by 64% compared to the previous year.
Private equity investment has been consistently spread across a number of key sectors such as information technology and digital, which attracted the highest number of private equity deals (19%), followed by food and agriculture, healthcare (16%), industrials, consumer (15%), energy and utilities (12%), and business services (8%).
By value of deals in Australia, healthcare has continued to dominate the sectors attracting private capital investment, representing 45% of all deals in 2018.
$2.2 billion in venture capital investment in 2018 with the value of venture capital deals having increased by 200% compared to the previous year.
Venture capital deals in 2018 were dominated by the IT software (39%) and IT digital (29%) sectors, which made up the bulk of total deal activity.
Deeper partnerships with institutional investors, long-term outperformance of returns, and an ever-increasing focus on responsible investing create the foundations upon which private capital will have an even more prominent impact on our economy and communities well into the future.