Australian private capital funds withstood turbulent global conditions, outperforming international peers on key return and fundraising metrics, according to the 2025 edition of the Australian Private Capital Yearbook, published by the Australian Investment Council (AIC) and Preqin.
The latest data shows that with one of the lowest risk profiles globally – measured by dispersion in net internal rate of return (IRR) between funds – the overall profitability of Australia-focused private capital funds, measured by median net IRR, is higher (13.8%) than funds focused on North America (12.4%), Europe (12.0%), and Rest of world (9.8%).1
Assets under management (AUM) remained relatively static at $139bn2 as of September 2024, with Australia-focused private equity, venture capital, and private credit funds accounting for nearly half of this at $65bn. In addition, venture capital AUM grew by 7% in the nine months to September 2024, reaching $17bn.
AIC CEO Navleen Prasad said the new data shows Australia remains an attractive market for international investors in the face of significant global headwinds and uncertainty.
“Private capital fundraising held up better in Australia than all other regions except Europe, declining by 14% year over year to $13bn in 2024 while North America and Asia contracted by 26% and 49%, respectively,” Ms. Prasad said.
“There are obvious challenges around liquidity and regulatory pressure, which are not unique to Australia, but overall, the prognosis for LPs and GPs in Australia is encouraging.”
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Preqin Global Head of Research Insights Cameron Joyce said: “Preqin’s analysis shows Australia’s private capital investor base is evolving and reflects growing demand from non-institutional investors. There has been a proliferation of new products to accommodate this demand, including open-ended structures. Amid significant volatility in public markets in 2025, investors continue to look to private capital as an effective way to gain exposure to long-term investment trends.”
The five-year median distributed to paid-in capital (DPI) – a metric measuring the capital returned to investors – came in at 0.39x for Australia-focused private equity funds with a 2019 vintage, better than that of global private equity funds of the same vintage (0.18x).
Institutional investors, including superannuation funds, account for over three-quarters (76%) of commitments when looking at Australia-focused private capital 2022–2024 vintage funds. However, private wealth investors’ share of commitments increased to 24% for 2022–2024 vintage funds, up from 8% for 2016–2018 vintages.
The full AIC Yearbook is available on the AIC website.
1. Dispersion and median net IRR refer to Australia-focused private capital funds with vintages between 2014 and 2021. Data as of March 2025. Rest of world refers to all other regions except North America, Europe, Asia, and Australia.
2. All $ currency units refer to Australian dollars unless otherwise stated.
