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Corporate venturing falls off

Latest figures released by the European Venture Capital & Private Equity Association (EVCA) show a marked fall off in corporate venturing activity during 2001. Direct investment by players located within Europe was €554 million in 474 deals. This is in marked contrast to 2000 figures where €1 billion was invested in 632 deals.

Also, there was a significant shift in fund sources in 2001, compared with 2000. In 2001 corporate venture capital funds raised over €179 million from outside their parent organisations – and 89 per cent drop on 2000 figures when a staggering €1.7 billion was raised from outside sources.

Write-offs by corporate venture funds increased significantly in 2001 -see table C.

Table A:

Headline] Independent funds raised by corporate venturers in 2001 by type of investorType of investor % Amount €mCorporate investors 11.9% 21,365Private individuals 1.5% 2,770Banks 30.7% 55,124Pension funds 8.4% 15,000Insurance companies 10.4% 18,575Fund-of-funds 17.3% 31,030Not available 19.8% 35,441Source: EVCA

Table B:

Headline] Stage distribution by % of total amount invested in 2001Stage % €mSeed 1% 5,562Start-up 56.4% 306,727Expansion 38.3% 208,106Replacement capital 3.7% 20,315Buyout 0.6% 3,057Source: EVCA

Table C:

Headline] Divestments in 2001 Type of divestment % at cost % of total number €mTrade sale 33.5% 26% 81,883Public offering 23.5% 31.3% 58,062Write off 26% 24.7% 63,557Repayment of preference shares/ loans 6.9% 7.3% 16,755Sale to a private equity house 0.4% 0.7% 953Other 9.5% 10% 23,152Total 99.8% 100% 244,362Source: EVCA

Table D:

Headline] Industrial sector of investment in 2001Sector % €mAgriculture 0.0% 251Chemicals & materials 3.4% 18,573Communications (other) 0.6% 3,259Computer: hardware 0.6% 3,298Computer: semiconductors 1.3% 6,844Computer: services 9.5% 51,711Computer: software 1.3% 6,841Computer: retail 27.6% 150,262Consumer: retail 2.7% 14,880Consumer (other) 3.6% 19,427Electronics 1.2% 6,450Energy 1.9% 10,536Financial services 0.4% 2,046Industrial automation 2.8% 2.8%Industrial products & services 0.9% 4,814Internet technology 10% 54,150Manufacturing (other) 2.3% 12,700Medical: healthcare 2.2% 12,034Medical: instruments/ devices 0.1% 517Medical: pharmaceuticals 0.4% 2,046Services (other) 1.5% 8,274Telecommunications: hardware 23.9% 129,828Telecommunications: carriers 0.8% 4,091Transportation 0.6% 3,050Other 0.5% 2,747Total 100% 543,767Source: EVCA