VCs line up M&A for 'low hanging fruit' in major shift on exits
Australian venture capital firms such as Investible have grown far more open to M&A among their portfolio companies as they look to boost a key measure of returns.
Some of Australia's most established venture capital funds are increasingly encouraging their founders to consider exiting via mergers and acquisitions as they look to lock in returns for their limited partners in a challenging investment environment.
Capital Brief has spoken to several funds who are relying on M&A to boost their Distributed to Paid-In capital (DPI), a key metric measuring the ratio of cash returned to investors relative to invested capital.
Among them is Charlie Ill, the CEO of Investible, which was established in 2014 and has $180 million under management. Ill cautions founders against "selling the farm" in the current market, but says the fund is open to exits that make sense and offer good returns.
"Exits are number one priority for us," he said. "That's one of those things we're doing is having a hard look at the fund one and we're looking at what's low hanging fruit.
