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The Australian economy provides an attractive environment for the continued growth of a vibrant private equity market. Australia is considered to have one of the best managed and most resilient economies in the world1, characterized by GPD and productivity growth rates amongst the highest in the developed world over the last 15 years, low levels of national debt, low inflation and a highly skilled workforce. It is one of the oldest and most stable democracies, with a highly respected political and legal infrastructure and a regulatory framework for its financial services sector which is regarded as among the best in the world2. New Zealand, with a population of 4.1 million and GDP equivalent to US$107 billion, has a smaller economy than that of Australia. 1 Australia was ranked the most resilient economy in the world for the fourth successive year. Source: World Competitiveness Yearbook 2005 2 A recent study published in the World Competitiveness Yearbook 2005 ranked Australia's legal framework third in the world and the transparency of its financial institutions was ranked second Over the longer term, economists are confident about New Zealand's economic prospects, as growth and development in the Asia Pacific region have beneficial impacts on tourism and demand for the country's products. Due to the established investment relationships and common time zones, Australasia is increasingly recognised as an attractive platform to grow businesses into Asia. For a number of international companies, Australia has become the preferred location for their regional headquarters. Private Equity Drivers Ironbridge recognises exploitable inefficiencies in Australasia where private equity activity is still lower than that of more established markets. The Australasian market will continue to attract significant amounts of domestic and international capital, which in turn will drive the growth of the industry and further enhance its credibility as an exit route for business owners, advisers and management teams. There is firm evidence of an increasing trend of divestment of family owned businesses to financial buyers as a result of generational changes and the buoyant stock market, while continued industry fragmentation provides opportunities for more complex "buy and build" strategies. The primary factors supporting the investment opportunity in Australasia include:
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