November 2009
Quarterly National Investor Survey – NOVEMBER 2009 Wholesale Investor Database Breakdown
Professional 7.0%
Venture Capital 5.0%
Anonymous online survey conducted November 2009 to entire Wholesale Investor registered database of 5,037 individuals.
Private Equity Professional 12.0%
The database includes: Private Investor 45.5%
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All Private Equity firms in Australia (approx 200) All Venture Capital firms in Australia (approx 40) Approx 2,900 private, wholesale investors CEO's of top 1,000 ASX listed companies CEO/MD of top 500 private companies
• • • •
CEO / Entrepreneur 30.5%
•
Approx 350 professional investors / institutional find managers
Type of Investments Sought 76.6%
KEY POINT: Private companies are still favoured, however pre-IPO is back in favour ranking second, and above ASX listed companies and property deals.
53.2%
Private companies
48.1%
Pre-IPOs
39.0%
ASX listed companies
Property deals
13.0%
11.7%
Managed & w holesale funds
Offshore deals
Note: respondents could select up to 3 choices.
Your Views on Current Investment Environment 37.7%
35.0%
23.4%
KEY POINT: Extremely positive investor sentiment at the moment with 61.1% saying that now is very good, or the best time ever to invest. This compares with just 3.9% saying that now is not a good time to invest This means that 96.1% are seeking to invest right now.
2.6% Now is the best time to invest that I have experienced
Now is a very good time to invest
Now is an OK time to invest
1.3%
Now is not a good time Now is the w orst time to to invest invest that I have ever experienced
Approximate Value of Investment Portfolio (FUM) 42.9%
KEY POINT: 40.3% have $1m or more in their investment portfolio. Total FUM is in excess of $27.7 billion
22.1% 16.9% 6.5%
Up to $500,000
$500,000 to $1m
$1m to $5m
$5m to $10m
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11.7%
$10m to $50m
November 2009
Percentage of Portfolio in Cash Vs Deployed 40.3%
KEY POINT: 32.5% have 50% or more of their investment funds still in cash. This compares with 39.9% in the August survey, meaning that investors have been deploying capital over the last 3 months as the market strengthens.
14.3%
Less than 10%
10% to 20%
9.1%
5.2%
7.8%
20% to 30%
30% to 40%
10.4%
7.8%
40% to 50%
2.6%
50% to 60%
Sectors of Most Interest Right Now
60% to 70%
70% to 80%
1.3%
1.3%
80% to 90%
90% to 100%
(Note: respondents were asked to select their top 3 sectors)
51.9%
Green tech/ cleantech 37.7%
Property / Construction / Housing 31.2%
Internet / IT
27.3%
Financial / professional services
26.0%
Mining / Mining services
23.4%
Import / Export / Wholesale Biotech / Lifesciences
14.3%
Healthcare / Pharma
13.0%
Industrial / Engineering
13.0% 11.7%
Education / Training Telecommunications
10.4%
KEY POINT:
Manufacturing
10.4%
• • •
7.8%
Media Other
6.5%
•
Leisure / Entertainment
6.5%
•
Food / Hospitality
6.5%
•
Retail
6.5% 3.9%
Transport Automotive
Cleantech leads the way for the second quarter in a row Property has moved from 6th position in April, up to 2nd place Financial / professional services has moved from 9th position in April, up to 4th position Industrial/Engineering has fallen out of favour dramatically - from 1st position in April, down to 9th position Education has fallen from 2nd position in April, down to 10th position Traditional sectors including Media, Leisure, Retail, Manufacturing and Telecommunications, Transport and Auto remain out of favour at this point in time
2.6%
Most Important Deal Attributes When Making Investment Decisions KEY POINT: Not surprisingly, Strength of Management Team leads the way for the third quarter in a row. It is unlikely this will ever change. The pitch now counts for virtually nothing. Future projections are not greatly relied upon with only 13% of the respondents ranking it amongst their top 3 attributes.
68.8%
When raising capital, entrepreneurs need to focus heavily on Management, Proof of Concept, Business Plan, and Path to Exit. Management must have a proven track record and they must only present to investors who seek to invest into their sector.
41.6%
40.3% 31.2%
29.9%
29.9% 18.2%
13.0% 0.0%
Strength of Management Team
Sector
Proof of concept
Quality of business plan
Proven track Clear path to record exit
Note: respondents were asked to select their top 3 attributes.
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Historical earnings
Financial Quality of the projections pitch
November 2009
Biggest Challenge When Finding and Making Investment KEY POINT: Investors are still finding it difficult to locate suitable places to park their capital. Unrealistic valuations continue to be a major problem. It is also clear that many companies approach investors when they are not yet investor ready. And even in the current economic times, many entrepreneurs are inflexible with the way investors might enter the transaction. Only 7.8% of respondents found that they were seeing too many opportunities.
45.5%
42.9% 31.2%
27.3%
7.8%
Finding suitable opportunities
Valuations too high
Companies are unprepared
Inflexible founders/promoters
Too many to choose from
Note: respondents were asked to select their top 3 challenges.
Type of Investments that are of Most Interest KEY POINT: Direct equity remains strong, followed by Distressed Assets. As a result Wholesale Investor has begun to list companies in VA.
63.6%
Taking companies public is becoming popular, in line with the renewed interest in IPO's.
46.8% 29.9%
Direct equity - Strategic investment through the issue of fresh capital
Distressed assets assets in distress or companies under Administration
27.3%
High yield returns - High Acquisitions - complete profit margin producing purcahse of a company strong dividend yields or to add to an existing investment
23.4%
Private to public arbitrage value investing into private company then taking them to IPO
Note: respondents were asked to select their top 2 preferred investment types.
Short Term View on Australian Economy – Next 2 Years
Long Term View on Australian Economy – 2 To 5 Years from Today
Pessimistic 2.7%
Pessimistic 2.1%
Concerned but optimistic 31.3%
Concerned but optimistic 19.8% Optimistic 66.1%
Optimistic 78.1%
KEY POINT: In the short term, Investor Optimism has risen from 50% in April, to 66.1% in November. Concerned but Optimistic has fallen from 46% in April, to 31.3% today. Positive Investor sentiment is well and truly back.
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November 2009
Source of Financial / Business Information 66.2%
Financial Review 37.7%
ABC Business New s (Lateline Business) BRW
24.7% 20.8%
The Australian
15.6%
Google New s new s.com.au
14.3%
Bloomberg
13.0% 11.7%
businessspectator.com.au
10.4%
Sky Business New s smartcompany.com.au
9.1% 7.8%
Reuters
6.5%
afr.com Yahoo Business
1.3%
Note: respondents were asked to select their top 3 sources of financial news.
For Further Information Please Contact … •
Reuben Buchanan - Director
Email: r.buchanan@wholesaleinvestor.com.au
About Wholesale Investor … Wholesale Investor is a Capital Raising solution for Private Companies. Through a subscriber only magazine and website, we provide high net worth, CEO's and professional investors with direct exposure to private investment opportunities who are seeking capital. Wholesale Investor is the largest platform of its kind in Australia with over $300 million of capital being sought, and over 5,000 registered investors on our database. Wholesale Investor provides a business introduction service in accordance with ASIC Class Order 02/273 (Class Order) which provides an exemption to the disclosure requirements under section 708 of the Corporations Act (Cth) 2001 (Act). This allows unlisted companies to raise up to $5m without a prospectus. For more information, please visit www.wholesaleinvestor.com.au
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Office: 1300 597 595