Private equity’s relentless rise risks undermining the size and diversity of the Australian sharemarket, as privatisations handily outnumber floats, the Reserve Bank of Australia has warned.

Investment funds had approximately $66 billion in privately held Australian assets last June, up 75 per cent from December 2019. Meanwhile, the S&P/ASX 200 has kept shrinking as companies are plucked off the exchange and a dearth of fresh listings renders the IPO window closed, the RBA found in its latest bulletin.