Figures compiled by Thomson Venture Economics and PricewaterhouseCoopers on behalf of the European Venture Capital Association’s membership indicate that 2003 was only slightly better a year for fund raising than 2002. Fund raising in 2003 stands at €28bn compared to €23bn in 2002. As expected given the poor state of the venture market and its returns, the majority of this figure was raised for later stage and buyout funds.
In terms of monies invested in 2003, the total preliminary equity invested was just over €23bn and two-thirds of this went into buyouts.
Of divestments the most notable feature was a large drop in the number of write-offs when compared to 2002. Total divestments in 2003 amounted to €9.5bn and 15% of this was accounted for by write offs. Total divestments in 2002 amounted to €10.7bn and 30% of this was write-offs. The outlook for this year (2004) looks promising already with stock markets beginning to be open for IPO activity and M&A markets showing early signs of a rebound.
Keith Arundale, European venture capital leader at PricewaterhouseCoopers, says: “The industry anticipates increased venture capital activity in 2004 with write-offs now largely completed, better results from technology companies, more spending forecast on IT, and improving exit routes.”