Private equity focuses on portfolio support as downturn hits Q1 activity - venture and growth capital investment relatively robust
22nd June 2009
According to the European Venture Capital Association, private equity fundraising, investment and divestment activity fell during the first quarter of 2009, as investors focus on managing their existing portfolios and commitments. The data, released by EVCA today, also shows venture capital and financing for SMEs proving more resilient in the face of the downturn.
EVCA and Deloitte study finds that venture capital investors are changing their strategies in the recession
11th June 2009
The global economic downturn has many venture capitalists altering strategies, including reducing investment levels in the short term, according to the 2009 Global Venture Capital Survey by Deloitte Touche Tohmatsu and the European Private Equity & Venture Capital Association. Fifty-one percent of the survey respondents are decreasing the number of companies in which they plan to invest and just 13 percent are increasing this activity.
The 2009 Global Venture Capital survey, which measured the opinions of more than 700 venture capitalists worldwide, also shines headlights into the post-recession landscape. The globalisation of the venture capital industry is set to intensify as target geographies and fund investor bases become increasingly international. Meanwhile, the cleantech sector is poised to become the leading investment category for venture firms.
“The current economic downturn has resulted in venture capitalists chiefly focusing on their current portfolio of companies,” said Serge Prosman, Partner, Deloitte Belgium, Financial Advisory Services. “However, the availability of high quality opportunities at reasonable valuations are likely to arise, that could potentially improve the outlook for venture capitalists in Europe, both in terms of euros invested and investment returns."
The 2009 Global Venture Capital Survey was conducted in the first quarter of 2009 and measured the opinions of more than 700 venture capitalists worldwide. For the complete survey results report, please visit: www.deloitte.com/2009VCSurvey.
European Private Equity Investments down by 28% in 2008 but investments in seed and early stage companies grow
9th June 2009
Consolidated data from the European Venture Capital Association today suggests that private equity investments fell by 28% during 2008 to €54 billion. This was due to a 40% fall in large scale funding and mega-buyout deals and a 30% fall in small and middle market deals. The number of direct company financing deals fell by 20%.
During the course of 2008 the market situation deterioriated as investors came to grips with the scale of the downturn. The biggest fall was in the final quarter.
Yet the news is not all bad. Venture Capital investments in early stage companies went up by 15% and seed financing went up by 7%. Some 20% of all growth and buyout financing was to small companies in 2008, up from just 12% in 2007.
Siding with the Angels: New research shows how to make a profit from risk
21st May 2009
New research published by NESTA (National Endowment for Science, Technology and the Arts) in collaboration with the BBAA (British Business Angels Association) reports for the first time that Business Angels stand to make a substantial profit from investing in start-ups, with an average Internal Rate of Return (IRR) of 22 per cent over four years, compared with 27 per cent IRR in the US.
Business Angels - investors who put personal money directly into young unquoted companies - are a significant source of early stage finance. But despite their increasing importance, little is known about their outcomes and returns in the UK.
The report reviewed 1,080 investments. More than half were directed at very early stage, pre-revenue start-ups - the riskiest time of a company's life. This was reflected in the investment returns. Despite the fact that the majority of investments make a loss (56 per cent in this study), a substantial number (44 per cent in this study) lead to positive returns with 9 per cent generating more than 10 times the capital invested.
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