Media release

15 July 2014
Inquirys interim report supports more investment into SMEs
The release of the Financial System Inquiry's interim report today has been welcomed by the Australian Private
Equity & Venture Capital Association Limited (AVCAL).
"The Inquiry has clearly identified that small and medium sized businesses in Australia need better access to
growth capital funding, in particular venture capital and private equity," said AVCALs Chief Executive, Yasser El-
Ansary.
The report points out that venture capital and private equity funds tend to finance more innovative and high-growth
firms in our economy, and that "these firms are drivers of long-term productivity growth".
However, the report also noted that Australias venture capital and private equity markets are small, and there are
barriers to generating significant investor interest.
AVCAL believes that Australian private equity and venture capital funds can play a more significant role in
supporting investment into an additional 30,000 Australian businesses if current roadblocks to more efficient
fundraising and investing are addressed as part of this review.
"Australian venture capital funds are currently invested in around only 200 startups and early stage ventures.
Private equity funds are currently invested in fewer than 350 businesses in Australia. This means they presently
have funding capacity to back less than two percent of the total investable pool of up to 30,000 businesses, said
Mr El-Ansary.
"There is substantial scope for the industry to play a greater role in building Australian businesses and creating new
employment opportunities especially in new high innovation industries of the future if the Inquiry makes
recommendations for changes to some existing policies and regulations later in the year."
The Inquiry appears to be agreeing with our view that reform of the venture capital limited partnership tax rules is
one very simple way that the Government could help drive greater private sector investment into Australian
businesses, said Mr El-Ansary.
In its submissions to the Inquiry, AVCAL recommended that the MySuper reforms introduced in the last few years
should be reviewed in order to assess whether or not they were meeting their original policy objectives. Its
positive that the Inquiry seems to be heading towards a similar conclusion, said Mr El-Ansary.
Over coming months AVCAL will continue to participate in the next phases of the consultation process as part of
this review.
Full copies of AVCALs submissions to the Inquiry can be downloaded at www.avcal.com.au.
For media inquiries
Gabriel McDowell
Res Publica
gmcdowell@respublica.com.au
+61 2 8297 1515
+61 417 260 918


About AVCAL
The Australian Private Equity & Venture Capital Association Limited (AVCAL) is a national association which
represents the private equity and venture capital industries. AVCAL's members comprise most of the active private
equity and venture capital firms in Australia. These firms provide capital for early stage companies, later stage
expansion capital, and capital for management buyouts of established companies.
www.avcal.com.au www.twitter.com/avcal1 www.linkedin.com/company/avcal