New European private equity funds raised in 1999 reached a record level of e25.4bn – up 25% on 1998 – according to figures from the European Venture Capital Association (EVCA).
And, significantly, the EVCA figures show that pension fund investment accounted for 18.7% of new fund sources in Europe last year – only eclipsed by banks with 29.1% and above the portion of 13.2% invested by insurance companies.
The bumper figures, unveiled at the EVCA Annual Conference in Paris on June 8, were heralded as proof of the bounty being enjoyed by venture capitalists in Europe.
Marco Rochat, EMEA leader of the global technology group at PricewaterhouseCoopers, commented: “This is a golden time for private equity in Europe. US private equity houses are setting up their funds and operations in Europe and investors have the possibility of better liquidity thanks to the arrival of exchanges such as the Neuer Markt in Germany, France’s Nouveau Marché, AIM in the UK and others like the EASDAQ.”
The survey of 17 countries, included four Central European countries – Czech Republic, Hungary, Poland and Slovakia – surveyed as a pilot. Their results were not included in the European table, however.
Figures show the UK still leading the private equity arena with almost e9.9bn of raised funds. The amount was more than double that of the second biggest market, France, with around e4.3bn raised, and almost three times Germany’s e3.8bn. Italy raised e1.75bn, the Netherlands just over e1bn and Sweden e990m.
However, in terms of new fund origin, US companies marginally pipped their UK counterparts raising e4,079m against e4,057m. German and French groups battled it out for third and fourth place raising e3,613m and e3,554m respectively.
Buyouts still remain the most favoured allocation amongst private equity stages, with predicted market share of 46.6%.
However, the boom story concerns high-tech early stage investment, which is expected to garner 19.9% of allocation. High-tech expansion and development funds are also expected to receive around 13.2%.
Total amount invested also reached an all-time high of e25.1bn – up 74% from 1998, with the UK investing not far from half of the total (e11.5bn), followed by Germany (e3.2bn) and France (e2.8bn), Italy (e1.8bn), Netherlands (e1.7bn) and Sweden (e1.3bn).
The UK also received the highest amount of private equity investment – just over e9bn, close to the amount received by the rest of Europe combined.