The results of the sixth Venture Capital survey show that there was strong growth in funds committed to venture capital investment vehicles during 2004–05. As at 30 June 2005, investors had $11.2b committed to venture capital investment vehicles, an increase of 25% on the $9.0b committed as at 30 June 2004. Investors had $6.1b of committed funds drawn down at 30 June 2005, an increase of 20% on the previous year end ($5.1b at June 2004). This left $5.1b of committed funds yet to be called on, up 32% on the $3.9b of unused commitments as at June 2004. See table 1 for details. Most of the committed funds were sourced domestically, with 94% of the total investment from Australian investors (up slightly on June 2004).
While commitments and committed funds drawn down both increased strongly to the end of June 2005, the value of investments by venture capital investment vehicles at the
end of 30 June 2005 ($3.5b in 912 investee companies) increased at a slower rate (14% on the $3.1b at the end of June 2004). Investments in these 912 investee companies were
reported by 210 venture capital investment funds and companies (195 in 2003–04). The increase in the level of investment, derived after deduction of fees and other expenses, exits and allowing for holdings of liquid assets, was due mainly to the contribution of new and follow-on investments during 2004–05 ($1,022m, up 63% on investments made during 2003–04).
During 2004–05, the total value of all exits through trade sales, sale of shares (including IPOs) and buybacks amounted to $1,043m (representing $572m of investment and $471m profit over the life of the investments).
The selection of investee companies (into which venture capital is invested) was an intensive process. The total of 140 venture capital managers reviewed 10,199 potential new investments during 2004–05 and conducted further analysis on 1,094 of those, with 176 being sponsored for venture capital. These managers spent a total of 163,000 hours with the investee companies (179,000 in 2003–04), advising and assisting in the development of the enterprises.