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Private Equity in Australia | Top Firms List | Salaries | Jobs

Updated on May 28, 2024
Article byWallstreetmojo Team
Edited byAaron Crowe
Reviewed byDheeraj Vaidya, CFA, FRM

What Is Private Equity in Australia?

The private equity market in Australia has been growing rapidly, especially because the demand for small firms has increased drastically. Even if the Australian market is way smaller than the US and UK markets, private equity in Australia has been creating great opportunities for new and small businesses.

What Is Private Equity in Australia

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Source: Private Equity in Australia | Top Firms List | Salaries | Jobs (wallstreetmojo.com)

The revenue in the private equity sector of Australia is expected to grow 2.3% annually over the next five years from 2022-23. A rise of 2.4%, totaling to $560.1 million is to be recorded in the current year 2023. The expected profit for the period is approximately 24.3% of the revenue.

Private Equity Market in Australia

The Australian private equity market has always been grappling with issues that act as a hindrance to its growth. In 2016 as well, it was no different.

From plummeting the Australian dollar against the US dollar to political unrest, the private equity market in Australia has faced immense challenges in recent times.

Even a few big shots like Dick Smith, Spotless, and other top firms backed by private equities hit the skids in 2016.

Steve Byrom, Australia’s Future Funds’ head of equity, analyses the whole private equity in Australia in the following manner. He says that the private equity market in Australia is about 10% of the whole fund, i.e., around Australian $11.5 billion (almost US $8.6 billion). And most of the private equity exposure comes from the US, around 60%. The rest is split among Europe, the UK, and the emerging markets of Australia.

Private Equity in Australia - Champ

Source: dealstreetasia.com

To understand the private equity market, here are few statistics to look at –

  • It is seen that 6% of Australian GDP goes to China.
  • During the year 2005 to 2015, around Australian $78.7 billion was invested by the Chinese as per the report of KPMG.
  • The weighted average return of private equity-backed IPOs, over $100 million from 2013 to 2015, is 26.4%.
  • According to the Australian Private Equity & Venture Capital Association and Rothschild Australia, the weighted average return of non-private equity-backed IPOs from 2013 to 2015 is 8%.
  • It has also been found that the health care fund now tops the list.

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Services Offered

In Private Equity in Australia, private equity banks’ services are slightly different from other private equity markets in the world. Let’s have a look at the services offered by private equity in Australia –

Private Equity in Australia (Services)

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  • Expansion Services: Private equity in Australia helps private companies push the envelope and grow as much as possible. They assist in providing funds required to expand private businesses and offer them advisory so that they can mitigate risks along the way.
  • New product development: The Australian private equity market is still an emerging market. And there is enough room for private companies to develop new products every year. But new product development needs a lot of research, building prototypes, and a lot of trial and error, and a huge sum of money is required. In Australia, private equity banks have been instrumental in assisting private businesses to concentrate more on new product development and create more value for their customers.
  • Mergers & Acquisitions (M&A): This is the most common. In the Australian market, private equity banks hugely invest in mergers & acquisitions and provide advisory services so that the whole process becomes easier and swifter.
  • Funds for ownership/management change: A private business needs funds to run its operations smoothly. If there is any change in ownership or management, the whole process needs funds to implement. Moreover, private businesses also need to handle the effect, which can be huge attrition rates or a stock market downturn. Private equity in Australia helps private companies deal with ownership/management change and any effect whatsoever

Top Private Equity Funds in Australia

Here are the top funds that are currently in the spotlight in the Australian private equity market. The research report has been given by PEI Research & Analytics. And the data is mentioned as of the year 2016, and it has been ranked as per the target size of the funds.

  • Medical Research Future Fund: This fund is managed by Australia Future Fund. The sector of the fund is healthcare. And it has opened in the year 2015. The target size of this fund is Australian $14590.70 million.
  • Champ IV Fund: This fund is managed by CHAMP Private Equity. It opened in 2015. The target size of this fund is Australian $1094.30 million. The sector of the fund is diversified.
  • Blue Sky Strategic Australian Agriculture Fund: The fund’s fund manager is Blue Sky Alternative Investments. The sector of the fund is agribusiness. And it has started in the year 2015. The target size of this fund is Australian $218.86 million.
  • Next Capital III: This fund is managed by Next Capital. The sector of the fund is diversified. It has opened in the year 2013. The target size of this fund is Australian $218.86 million.
  • Australia VC Fund III: The fund manager is Blue Sky Alternative Investments. The sector of the fund is technology, media & telecommunication. And it started in the year 2015. The target size of this fund is Australian $218.86 million.
  • OneVentures Innovation Fund II: The fund manager of this fund is OneVentures. The sector of the fund is diversified. And it has started in the year 2014. The target size of this fund is Australian $100 million.
  • AirTree Ventures Fund II: This fund is managed by AirTree Ventures. The sector of the fund is technology, media & telecommunication. It opened in 2016. The target size of this fund is Australian $72.95 million.
  • Reinventure Fund II: The fund manager of this fund is Reinventure Group. The sector of the fund is diversified. And it started in the year 2016. The target size of this fund is Australian $72.95 million.
  • Digital Accelerator LP: This fund is managed by Adventure Capital. The sector of the fund is technology, media & telecommunication. It opened in 2012. The target size of this fund is Australian $58.36 million
  • MHC&C – Vivant Ventures Accelerator Fund: This fund is managed by M.H. Carnegie & Co. (MHC&C). The sector of the fund is technology, media & telecommunication. It opened in 2013. The target size of this fund is Australian $58.36 million.

Also, check out the List of Top 10 Private Equity Firms.

Recruitment Process

In private firms in Australia, the recruitment process is quite different. But what’s best about the recruitment of Australian private equity firms is the inclusion of all candidates. You can have a different ethnic or regional affinity, but you will only be judged by your merits and the eligibility criteria for the job. Your background will not decide your fate in the recruitment process.

Here’s a snapshot of the recruitment process of one of the topmost private equity firms in Australia –

  • Online application: The first process is really simple. All you need to do is to apply online. You need to fill up an application form and submit your details. Then, the respective authorities will check out your application based on your qualifications and experience. You will either be shortlisted for the next round or will be put through for future openings.
  • The first round of interviews: Depending on your location, you will be asked to come for an interview mostly for one or two rounds. In the first round, you will be meeting with a partner and a senior associate from the HR committee. You will be having a friendly discussion, and you will be assessed based on your ability, type of work you did, and area of expertise.
  • The second round of interviews: The second round is often kept for the best candidates. Generally, this round will ultimately decide who will be offered the open position in the private equity firm. During the second round of interviews, you will be meeting another partner of the firm and a solicitor from the recruitment department. You can ask any questions related to the job or company you might have.
  • Friendly meeting sessions: Usually, after the interview, you will be meeting the firm’s other partners and associates to understand the organizational culture and how it is to work for the firm. And you will also be invited to the firm’s events so that you can get a feel for the organizational behavior and work standards. Although this meeting is completely optional, it would not be considered in the recruitment process.

Also, check out How to get into Private Equity.

Culture

In private equity in Australia, the organizational culture is the best part. Even though the private equity market has been going through a few issues, the organizational culture in most private equity firms has been instrumental in bringing harmony between employees and achieving organizational objectives via coherence.

As all the partners are chosen after looking at their past track records, funds they managed before, and the performance they have shown, again and again, usually, the result is quite satisfactory. Even after a few struggles and many mishaps, the Australian private equity market has still been going strong as of 2016.

The outlook of every private equity in Australia is global, and they look forward to becoming one of the topmost private equity markets in the world.

Salaries

You may have cringed about going to Private Equity in Australia for a great job. If you are one of the top candidates who have worked for a few years in the private equity market in Europe or the US, thinking that Australia has little or no chance of making it big in private equity, then maybe it’s time to reconsider your options.

Australia’s private equity market is quickly becoming robust, and many top-notch private equity firms are interested in expanding their horizon to Australia. For example, JPMorgan Partners Asia has recently opened an office in Melbourne. US-based private equity firm Carlyle Group has also opened a new Sydney office.

But what’s about the compensation? Are they looking up?

Have a look at the below chart which will help you understand where the compensation in the private equity market stands in Australia as of now –

Private Equity in Australia

source: au.neuvoo.com

According to the above chart, it is clear that the average private equity salary is Australian $154,000 or $79 per hour. If we do the math, this is almost 2.6 times more than the median wage in Australia.

If you start in private equity in Australia, you will make around $108,000 per annum. And as you gain more experience, your compensation will increase gradually. And with more experience, you can even earn up to Australian $216,000 per annum.

Exit Opportunities

Even if private equity in Australia has hit the skids in 2016 quite a few times, the market still looks strong, and there is a lot of room for growth. Thus, exiting from private equity thinking that the dangers loom soon may not be a good idea.

For example, if we look at the statistics, we would see that in the year 2015, there was an almost 54% increase in the value of deals done by private equity in Australia. And the value of the deals was around Australian $3.3 billion.

After all of it, if you still want to exit, there are opportunities for you. You can move to a hedge fund. Or you can consider becoming a venture capitalist. You can also join a portfolio company or join an advisory board.

But the idea is to stick to private equity if you want to generate a big return in your career (both financially and on the basis of job satisfaction).

This article has been a guide to what is Private Equity in Australia. We explain the services offered, top funds, recruitment process, culture, and salary. You may also look at the articles below to learn more about Private Equity.