Australia’s private capital assets rose 8.4% to a record high A$77 billion (US$59.75 billion) in the first half of 2020 from A$71.03 billion at the end of 2019 on the back of demand for technology investments, according to data provider Preqin.
Private equity and venture capital grew for four consecutive years, with combined assets of A$37 billion as of June 2020, Preqin says in a report on May 25.
Australia’s private capital market is growing strongly and global investors are keen to capitalise on “the massive value creation wave” in the unlisted market, according to Yasser El-Ansary, chief executive of the Australian Investment Council, an industry group.
Venture capital tax breaks under review
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The federal government will review venture capital tax breaks, raising hopes in the industry that the incentives will be broadened to entice investment.
Buried in the government’s digital economy strategy measures announced on Thursday was a pledge to review the venture capital tax concession programs to “ensure the programs are fit-for-purpose and support genuine early-stage Australian start‑ups”.
Under the current Venture Capital Limited Partnerships rules, investors funding venture capital fund-backed businesses valued at up to $250 million are eligible for tax breaks.
Australian Investment Council chief executive Yasser El-Ansary said the valuation threshold was too low and needed to allow venture capital backed businesses to grow bigger.