There are signs of an upturn in the market according to a preliminary report of the French private equity market by the French Venture Capital Association, AFIC and Ernst & Young. An estimation as of 8 March, 2004 records an overall improvement of the IRR by year of investments since 1994. The study is based on the performance and data provided from 58 funds which represents 42% of the total amount invested over the last ten years.
The gross ten-year IRR (1994-2003) has registered a slight increase mainly due to a stable IRR on investments realized and a noticeable improvement of the performance of the current portfolio. Performance in 2003 remained stable up slightly from 19% in 2002 to 20% on a total investment amount of €11,460m.
The LBO market outperformed the French private equity market as a whole with an IRR of 22%, up from 19% in 2002. The research highlights the year 2002 which appears to be a strong vintage for both investments realized and for those still in the portfolio. The performance on the investments realized remains almost identical to last year at 33%. However, portfolio valuation remains conservative with an IRR of 6% compared to 13% last year.