When it comes to the impact of the ongoing coronavirus pandemic that has engulfed the world, Australia has fared much better than most of its contemporaries. While the lockdowns imposed to contain the spread of COVID-19 had an adverse impact on all levels of society. Australia’s robust economy has bounced back quickly from the initial impact of the virus.
According to Australian entrepreneur, Darren Herft, “We have managed to contain the sporadic outbreaks that have had a crippling effect on the private equity market in many countries around the world. That is highly commendable.”
Even so, the curbs on international travel have resulted in a significant decline in the rate of foreign capital flow into the country.
“The loss of foreign investment has slowed things down but as the vaccination programs progress and regulations loosen, investment in private equity is bound to rise again”, says Darren Herft.
With the lack of physical travel and the inability to meet international business partners. Australians involved in the private equity arena have found creative ways to communicate and broker deals.
Darren Herft contends that the number of deals negotiated over video conferences has seen a meteoric rise and the efficiency of doing so may even replace older, more intensive ways of conducting business in the country.
The veteran private equity investor believes that policy decisions taken by the government are also responsible for the slowdown.
“There are reasons for the short-term economic decline we’re seeing, apart from the physical limitations that firms have to contend with,” says Darren Herft.
Like many other countries, Australia constricted its foreign investment approval guidelines to protect the national interest and prevent opportunistic foreign investors from taking undue advantage of local businesses reeling under pressure from the pandemic.
“As soon as the pandemic hit, all foreign investments were required to obtain special approval from the federal government,” explains Darren Herft.
These changes were reversed only recently, and previous limits have now been restored.
Darren Herft is of the opinion that vaccination programs in Australia as well as across the rest of the world are exceeding expectations and that it bodes well for the global economy.
“As international airlines gear up to tackle the inevitable influx of travelers, I fully expect the latter half of 2021 to experience a substantial boom in private equity,” he adds.
He also thinks that Australia’s competent handling of the crisis, coupled with its stable socioeconomic position makes it an enticing investment prospect for foreign investors looking to grow their capital.
“The intensely competitive home markets in America and Europe have inflated prices and costs.”
Herft thinks this works to Australia’s advantage as it presents firms with lucrative opportunities.
He also believes that the exchange value between their currencies and the Australian dollar gives them a reason to see the country as a promising prospect.
“All indicators point to the fact that we will continue with the trend of attracting offshore private equity firms based in Europe and America,” says Herft.
