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Wednesday, 17th April 2024
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Irish venture capital growth rockets ahead in Europe Back  
Investment in European private equity increased by a quarter in 1999, according to the most recent figures published by the European Private Equity and Venture Capital Association (EVCA).

In its annual survey on European private equity, the EVCA say total funds raised in 1999 were up to E25.4 billion from E20.3 billion in 1998.

According to the EVCA Yearbook 2000, total new funds flowing into the Irish industry doubled from IEP129 million in 1998 to IEP249 million in 1999. 43 per cent of these funds are raised outside the island.

Across Europe, banks increased their venture capital investments raising funds by 31 per cent to E7.4 billion, but funds raised from the pension industry actually fell from E4.9 billion to just E4.7 billion.

Insurance companies increased their contribution to total funds raised from 9 per cent in 1998 to 13 per cent in 1999. Emile van der Burg, chairman of the EVCA, said the latest survey demonstrated ‘that the private equity industry is booming and is playing an increasingly important role in financing European businesses.’

During 1999, the UK maintained its leading position in the European private equity market, accounting for E9.9 billion (39 per cent) of the total funds raised. France and Germany followed with E4.3 billion (17 per cent) and E3.8 billion (15 per cent) respectively with Italy contributing E1.8 billion, an increase of 88 per cent on the previous year.

Across Europe funds raised for investment in high-technology companies, at the early and expansion/development stages, almost tripled from E2.9 billion in 1998 to E8.4 billion in 1999. Early-stage investment was tripled to E5.1 billion, whilst funds raised for investment in expansion increased by over 100 per cent to E3.4 billion. By contrast, funds raised for non-high tech companies at these stages were at similar levels to 1998.

In Ireland almost half of the new funds raised in 1999 were destined for high-tech early stage developments against just a 10 per cent share of the market a year earlier. Public sector investments were still significant here though, increasing from IEP5 million to IEP33 million last year.

Management buyouts accounted for the majority (53 per cent) of equity raised in Europe and at E13.3 billion it was up 79 per cent over the 1998 figure. The level of Irish buyout financing however remained at the same level as 1998 at IEP20 million.

European private equity investment in expansion of businesses maintained its share at 30 per cent with a 71 per cent increase to E7.4 billion.

For the first time, the survey looked at US-based funds raised for investment in Europe which were estimated to be E6.2 billion in 1999.
(See related story on page 2 ‘$100 billion US tidal wave builds)’.

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