AUSTRALIA Trends and Developments Contributed by: Andrew Stone, Dhanushka Jayawardena, Andrew Choi and Chris Kinsella, Holding Redlich
billion in 2023 to AUD10 billion in 2024. The number of deals declined by only 5%, indicating that average deal sizes decreased significantly, from AUD201 mil - lion to AUD72 million. Private equity managers adapted by diversifying transaction types. Corporate carve-outs became more prevalent, with nine deals in 2024 compared to one or two annually in the preceding decade. This shift reflects managers’ ability to find value in non- traditional structures as competition for conventional buyouts intensified. Take-private transactions remained significant, includ - ing Ardonagh Group’s AUD2.25 billion acquisition of Australian Securities Exchange (ASX)-listed PSC Insurance Group and Madison Dearborn Partners’ AUD1.3 billion acquisition of APM Human Services. Venture capital market recovery Preqin reports that Australian venture capital showed signs of recovery, with assets under management growing 7% to AUD17 billion in the nine months prior to September 2024. Both dry powder and unrealised value increased, bucking global trends and suggest - ing underlying strength in the Australian technology ecosystem. The AI sector continued to attract strong investment interest, with aggregate deal value reaching AUD1.3 billion in 2024 – a 49% year-on-year increase. This growth reflects Australia’s emergence as a significant technology hub, as well as the global focus on AI capabilities. Notable transactions included Hysata’s AUD168 mil - lion Series B funding round for hydrogen electrolyser technology and Harrison-AI’s AUD179 million Series C round. Private credit market expansion Private credit has emerged as a significant growth area for Australian alternative managers, with 51 Austral - ia-focused open-ended private credit funds tracking more than AUD25 billion in total net asset value (NAV). This represents the third-largest asset class by open- ended NAV, following real estate and infrastructure.
The open-ended private credit market is ten times larger than the closed-end equivalent, which stood at AUD2.7 billion as of September 2024. This dramatic difference suggests potential investor preferences for liquidity and the floating-rate characteristics of many credit instruments, which appeal to investors in rising rate environments. Both domestic and international managers have launched open-ended private credit solutions target - ing Australian investors, recognising the scale of the opportunity and the sophisticated nature of the local market. Real assets performance Real estate and infrastructure faced challenges from macroeconomic conditions, with assets under man - agement (AUM) declining 5.2% and 7.9% respectively in the nine months prior to September 2024. Despite these headwinds, real estate remained the dominant asset class for Australia-focused funds, with AUD54 billion in AUM. There is evidence that Australian insti - tutional-grade real estate has rebased as of Septem - ber 2025 and, as such, renewed capital market activity is anticipated. While separate mandates are common, co-mingled funds remain attractive, particularly to smaller institutional investors. Infrastructure deal activity showed resilience, with aggregate deal value increasing 92% year-on-year to AUD48 billion, bolstered by mega-deals in telecom - munications, airports, and data centres. The largest transaction was Blackstone Group and CPP Invest - ment Board’s AUD24 billion acquisition of data centre platform AirTrunk. Investor demographics and wealth trends Family office growth The most significant shift in Australian alternative investment demographics is the rise of family offic - es as the dominant investor type by number. Preqin reports that family offices now constitute 40% of active private capital investors, up from 25% in 2022 and 10% in 2020. This growth reflects Australia’s expanding high net worth population, which increased by approximately 8% in 2023 – well above the global average of 5%.
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