EUROPE- Funds raised for European private equity fell more than a third last year from e48bn at the end of 2000 to e31.5bn according to preliminary figures released by the European Venture Capital Association. Although the slowdown is significant, it is less severe than the US market which has seen funds halve in 2001.
The European market has been hit by the fallout of the IT and telecoms meltdown in the last two year. Nevertheless, the EVCA’s figures show that fund raising last year was still the second most successful on record.
The figures come in the wake of a study by the EVCA and Venture Economics, the private equity information provider, covering a total of e107bn in committed capital in 649 funds, that estimated private equity in Europe had an internal rate of return (IRR) in 2001 of -2.3% for all classes.
The survey said that lower company valuations, led by the technology sector, difficulties in exit routes and a weak European economic climate contributed to lower returns.