Overall there was a slight decrease in the performance of European private equity in 2003, compared with 2002 figures, according to European Venture Capital Association figures compiled by Thomson Venture Economics. Pooled private equity returns were 9.7% compared with 10.8% last year. Full figures evidenced in the charts below. Given that exit activity did not start to pick up in 2003 until end of Q3 and throughout Q4 of 2003 it’s not surprising that this up tick was too late in the year to have any significant impact on the overall figures.
There are, however, signs of the market improvement evidenced in the improvement against last year’s one year return figures. Although at -11.6% for one year in venture this figure was -30.7% in 2002. And while -4.1% for all private equity at one year doesn’t look promising at first glance, it is markedly better than 2002, which registered returns of -9.2%.
Jesse Reyes, vice president of Global Research at Thomson Venture Economics, says: “Although short term results provide some information as to whether performance is improving, private equity must ultimately be measured in the long run. Funds are trying to get into a healthier position by writing down weaker investments in preparation for what appears to be a resurgence in confidence in fund raising in the near term.”