Europe reaches record fundraising levels

Fundraising reached €72bn in 2005, a record for the industry in Europe and over two and a half times the 2004 level, according to figures compiled by Thomson Financial and PricewaterhouseCoopers on behalf of the European Venture Capital Association (EVCA) and released at the symposium in Monte-Carlo.

Pension funds took the lead as the main source of capital in 2005, overtaking banks for the first time since 2001.The final amount of equity invested reached €47bn, beating 2004’s record by 27.3%, with divestments at cost reaching record levels as well, at €30bn.

The figures include five buyout funds, which each raised over €3bn. The total raised for buyouts of all sizes reached €57.7bn, a trebling in size on 2004. Just under €11bn was raised for venture funds, encompassing early stage and expansion, a 24% increase on 2004 and funds dedicated to high tech doubled in size with early stage high tech allocation nearly trebling from €1.3bn in 2004 to €3.6bn.

Last year was also a record year for investment with €47bn invested in 7,207 companies beating 2004’s record of €39.6bn by 27.3%. Buyouts represented the majority of the total invested at 68.2% although for only 21.7% of deals done. Replacement capital doubles in size to €2.3bn in 2005 and venture activity experienced a 23% increase in equity invested from €10.3bn in 2004 to €12.7bn in 2005 and accounted for 74.7% of the total number of deals. EVCA estimates the European private equity and venture capital portfolio at the end of 2005 to be €173bn at cost.

At €28.9bn 2005 represented a record year for divestments at cost, up from €19.6bn in 2004. Write-offs were down to 4.7% from 9.7% in 2004 and the lowest ever. Repayment of preference shares/loans was the strongest exit route in 2005, representing 23.4% by amount, closely followed by the favoured exit route of the last few years, the trade sale at 22.6%. As in 2004 secondary buyouts ranked third at 18.4% of the total amount divested and the number of IPOs more than doubled with 259 listings compared with 105 in 2004.