Private capital cannot contribute to the country’s growth mindset and economy like a Commonwealth Bank or Fortescue, which threatens everyday wealth.
One of the big changes no one’s talking about is who is responsible for funding Australia’s growth.
It’s not public markets – IPOs have dried up; the biggest stocks in what should be the growth engine small caps are well-established companies such as contractor Ventia Services, grocery wholesaler Metcash and Vodafone-owner TPG Telecom; the market is rewarding dividend payers and there are more investors than ever hiding out in the top-10 names.
Somehow, we’ve turned growth funding into private capital’s domain. We have good listed companies exiting the bourse saying their best chance of accelerating growth is a stint with private equity (Reliance Worldwide Corporation, for example), start-ups and scale-up companies are raising private capital and staying unlisted for longer and boards are too scared to give new projects or strategies a nudge.
It matters because public markets have been a great wealth creator for millions of Australians. Households own 12.8 per cent of all shares in the ASX All Ordinaries and pension funds have another 30.2 per cent, according to JPMorgan, which is mostly Australian money.