Cold Reception

  

Photo credit: Jaxxon

A reader based in Moscow (!) asks:  is the private equity or VC fund raising situation in Australia any better than the cold reception we face in Europe?

I suspect the climate is slightly warmer in this part of the world (titter, titter.  Sorry, couldn't help myself). 

More seriously:

1.  The larger superannuation funds have continued to support local private equity.  Since 1992 all Australian workers have been required to contribute 9% of their income into retirement funds (which we call superannuation funds).  As a result Australia has built an extraordinary pool of retirement savings-- over $1.2 trillion.  In fact, per capita, Australians now have more money invested in managed funds than any other nation.

2.  Sentiment is not quite as bleak here as in the UK and USA.  Our banks are healthy and amazingly our economy has not yet gone into a recession-- though it feels like one to me.

3.  There are relatively few local PE and VC funds (only about 40) chasing the big pot of superannuation honey, and Australia is too far away to make it an attractive fund raising destination for most overseas private equity firms.

4.  At least half the Australian PE funds still have significant levels of uncalled capital and can therefore postpone fundraising.

To be clear, I'm not claiming that fund raising is easy here.  It's hard.  And I'm very, very glad my firm isn't out there this year. 

Perhaps for my next post I'll summarise the current crop of Aussie/NZ fund raisers and how each one is progressing . . . that will get tongues wagging.

Comments

[Claudia Henamann]

I will move to Sydney! We have been fund raising for 14 months now in Germany and still no closing.

But it is winter there right? Bondi beach is cold.

[Hank Z]

The US is DEAD, DEAD, DEAD for private equity fundraising right now.

Europe sick but not quite dead.

[Ac]

In regard to fundrasing, what do you beleive to be the best approach or tactic in this market? Any specific techniques that have helped you?