European private equity investment levels fell off by 60 per cent in Q1 2001 compared to activity levels in Q4, 2000, according to the first review of European investment activity levels by Venture Economics. Venture Economics, which is part of Thomson Financial and publishes evcj, will be publishing quarterly activity updates going forward. The figures recorded in tables I, II and III show disclosed equity investments made into European-based or headquartered companies. The venture capital/ private equity data includes only rounds with a disclosed amount and a named private equity financier, although disclosed equity amounts and named financiers are not a pre-requisite for the inclusion of buyout data (commented on later).
Early stage, which encompasses seed and early stage round investments, fell 68 per cent by value and 44 per cent by activity levels. These figures may remain depressed going forward as many venture capital investors have freely admitted that a proportion, in some cases the majority, of the funds they have to spend this year will be allocated to existing portfolio companies. This means those investments, if recorded, may fall into the expansion and later stage category – see table II.
The breakout by the nationality of the investee company makes the UK once again the largest destination of private equity funding in Europe – see table I.
Fund raising held up well with the preliminary volume for Q1 2001 recorded at $5.1 billion compared to $7.5 billion in Q4 2000.
…and of buyouts
In contrast buyout funding was buoyant and saw the volumes in Q1 2001 push ahead of those recorded in Q4 2000.
Reported buyout and acquisition equity funding rounds was low. A drop from $2.53 billion to $0.55 billion represents a 78 per cent decline, although only a 33 per cent fall by number of investments. When the same data is compiled using total funding value i.e. all debt as well as equity funding is included, the figures are significantly, and interestingly given the tightening of the debt markets of late, changed.
The total number of buyouts recorded for Q1 2001 was 148 with a total funding value of $12.8 billion. In Q4 2000 there were 177 deals recorded worth a combined total of $11.2 billion. These numbers include all buyouts regardless of whether a private equity firm was disclosed and regardless of whether the funding values were disclosed.