EUROPE – The European Venture Capital Association says the European directive on occupational pensions will provide a boost the venture capital and private equity industry.
“The adoption of the European Pension Fund Directive underlines the need to strengthen European retirement systems via pension funds by encouraging them to diversify their asset allocation through private equity and venture capital commitments,” said Jean-Bernard Schmidt, EVCA’s chairman.
According to the text of the directive, Institutions for Occupational Retirement Provision, pension assets should be diversified although they should be “predominantly invested on regulated markets”. And assets that are not traded on regulated markets “must in any event be kept to prudent levels”.
EVCA’s comments came as it reported annualised net returns of 9.9% in the European private equity market in 2003 – slightly down on 2002’s 10.8%. It said the European portfolio at cost is estimated at 139 billion euros, net of disinvestment, up from 123 billion euros a year earlier.
“These figures reveal what we on the ground have felt: a return of confidence and cautious optimism for 2004 which has already been borne out by a real upturn in investment activity in the first half of 204 and number of successful IPOs and trade sales,” Schmidt said,
EVCA said Herman Daems, chairman of Belgian investment firm GIMV, has taken over the chairmanship from Schmidt for a one-year term.
Daems said in a statement: “As awareness of the asset class increases, many new investors are expected to enter the market, particularly pension funds.”
He added: “In order to attract a higher and sustainable level of seed and start-up investments in the high-tech sector, we need to improve the long-term returns for venture capital in Europe compared to other asset classes.
“This requires the development of a stock market for high-tech and growth companies alongside a favourable environment for start-ups.”