Venture Index, which tracks sub £1m investment in small unquoted UK companies, has said investment in this area peaked in December last year with 375 deals being completed with a combined value of £50.2m.
In the 12-month period to February 2006 participants in Venture Index recorded a total of 364 deals with a value of £47.5m, which represents a rise of 385% in the number of deals recorded in February 2005. Venture Index operates as a 12 month rolling index.
Peter Claydon, group commercial director of YFM Group, which is one of the providers of data to Venture Index, said of the index: “Many participants in the index are frantically busy and therefore we are expecting a further uplift in the second quarter of 2006 as deals are closed.”
Modwenna Rees-Mogg, MD of Venture Index, said: “Expansion deals are leading investment activity in the last quarter, which included development capital, implying that investors are becoming increasingly risk averse and expecting companies to start delivering on sales and perhaps even profits before they can command equity investment. This is a notable shift away from the trend in the previous 12 months where early stage deals were dominant.”
Venture Index, which is updated quarterly, has been collecting data since October 2003 and has recently added Halo business angel network in Northern Ireland, Create Partners RVCF in East Anglia and North West Seed Fund in the North West of England.