Private equity inflows double in 1998
Investment in private equity in Europe almost doubled in 1998 to reach a new peak of e14.5bn, with pension funds contributing almost a quarter of the capital (e4.9bn).
And statistics from the European Venture Capital Association (EVCA) show remarkable investment growth in some of the smaller markets with Swiss figures shooting up almost 300%, Austria rising by 165% and Iceland by 332%. The UK saw 61% growth in the amount invested, followed by Italy with 55% growth.
Germany, France and the Netherlands also posted large increases of 47%, 42% and 39% respectively. Only Portugal, Norway and Sweden registered declines.
High-tech industries attracted the most investment, according to the EVCA, boosted by e1.7bn during the year, with computer-related companies garnering the most money.
Seed and start-up finance also more than doubled last year proving this to be the fastest growing stage of investment in Europe
Fundraising set a new record of e20.3bn, up by 1.7% from 1997.
Management buy-outs and buy-ins attracted on average just over half of the total invested amount, with country figures ranging from 71% in the UK, just under half in France and 29% in Germany.
A recent speech by UK prime minister Tony Blair to the British Venture Capital Association (BVCA) emphasising the need for a more enterprising approach to the investment of institutional assets has also been welcomed by consultants Bacon & Woodrow, William Mercer and Watson Wyatt.
The three believe the time has come for UK pension and life company funds to put more emphasis on opportunities besides quoted equities, particularly towards unquoted securities. They comment that the practical issues to address are not “insuperable”.