Capital raising transition changing market composition, research finds

As the number of ASX-listed companies fell 12 per cent between 2018 and 2024, from 2,012 to 1,773, research by an accounting body and two Australian universities found that most Australian companies are choosing private capital over an ASX listing.

The findings came from a June 2026 report by CA ANZ, the University of Melbourne, and the University of Queensland, and Australian financial reporting benchmarks, which produced benchmarks to determine financial performance and position using the past reported financial reporting data of the relevant population of ASX-listed entities.

According to the report, The Australian Financial Reporting Benchmarks 2026, the fall in ASX-listed companies from 2018 to 2024 does not seem to have a single cause, but reflects a combination of structural and cyclical factors, including “private-market growth, changing capital-raising pathways, regulatory settings, superannuation investment patterns and company choices about whether to raise capital publicly or remain private”.

The report said that more research is needed to explain why the number of listed companies declined in Australia amid a growing GDP and population.

In a February 2025 discussion paper by ASIC, Australia’s evolving capital markets: A discussion paper on the dynamics between public and private markets, the regulator said the decline in public listings was accompanied by a growth of the private market.

According to ASIC, global private capital assets under management in Australia-focused private capital funds nearly tripled over the past decade, increasing from $57.1 billion in 2014 to $148.6 billion in March 2024.

CA ANZ and Australian universities emphasised that with the surge in private capital growth, private markets need better data and transparency.

A changing relationship

CA ANZ reporting and assurance leader Amir Ghandar said its findings reflect a changing relationship between companies and Australia’s public markets.

“A decade ago, businesses looking for significant growth capital often saw a public listing as the next step. Today, many can access substantial private funding without entering public markets,” Ghandar said.

“While private markets play an important role in supporting business growth, strong public markets remain critical to the health of the economy.

“Public markets promote transparency, accountability and investor confidence through reporting, governance and disclosure requirements. A continued shift away from public markets could have implications for transparency and limit opportunities for investors to participate in the growth of Australian businesses.”

However, University of Queensland School of Business senior lecturer Dr Mark Wallis noted that this decline was not limited to Australia.

“This trend is not unique to Australia. Similar declines in listed company numbers have been observed in New Zealand, the United Kingdom, and the United States,” Wallis said.

“That suggests there are broader forces at work, including the growth of private capital, mergers and acquisitions, and changing company preferences about how they raise funds.

“Further research will help identify the most significant drivers behind this trend in Australia and better understand what it means for investors, capital markets and economic growth.”

Ghandar said that the report’s findings should start a conversation on whether Australia’s market settings are fit for purpose amid a transitional period for capital raising.

“The challenge is finding the right balance between encouraging companies to list and preserving the standards that make Australia’s capital markets trusted and competitive.”

He added that policymakers must consider reforms that improve the attractiveness and efficiency of public markets.

“High-quality, machine-readable financial information reduces friction for investors, improves comparability and makes Australian market data easier for global investors to access and use.

“If Australia wants deep, diverse and internationally competitive capital markets, we need a clear understanding of how the market is changing and what those changes mean for companies, investors and the broader economy.”