Euro Fundraising and Investment Up in 2011

The European Private Equity and Venture Capital Association has published its annual activity survey, demonstrating robust a fundraising and investment environment. The EVCA Yearbook 2012 reports that 40 billion euros ($51.4 billion) was raised in Europe last year, the highest fundraising level seen since 2008 and an 80% increase on 2010.


Today, the European Private Equity and Venture Capital Association (EVCA) announces the results of its annual activity survey, which demonstrates robust fundraising and investment by private equity and venture capital at a time of economic turmoil in Europe.

The EVCA Yearbook 2012 shows that:
• €40bn was raised in Europe last year across the industry as a whole, the highest fundraising level seen since 2008 and an 80% increase on 2010.
• Investmentswere a steady 6% up on 2010.
• Realized investments were up 50% on the previous 12 months and back at levels last seen in 2005-06.

Karsten Langer, Chairman of the EVCA commented:
“With investment activity up significantly during 2011 private equity and venture capital are clearly contributing to recovery in Europe. In 2011, fully 85%of the 4,800 companies backed were SMEs, and nearly half employed less than 20 people. It is these businesses that will drive growth and emergence from recession, and private equityinvestmentis helping them to achieve their ambitions.
“An 80% leap in fundraising demonstrates that investors from pension funds to charities are increasingly turning to private equity and venture capital to deliver long-term, sustainable returns in a climate of uncertainty in Europe.”

Key findings

• 2011 trend of the fundraising market confirmed its recovery and enhances the prospect of a long-term upturn.
• 2011 fundraising amount reached €39.8bn, an overall increase of 80% from 2010. This increase has been initiated by both venture capital funds, with a 50% growth of their fundraising activity and buyout &growth funds who doubled their new funds raised over 2011.In 2011, the number of final closing continues to grow since 2009, reaching almost 90% of the 152 final closings in 2008. This increase has been sustained by the buyout &growth segments: whereas there were 27 final closings of buyout &growth funds in 2009 and 47 in 2010. Sixty funds reached a final closing in 2011.
• The main type of investors differs by fund stage. In term of amounts, government agencies, private individuals and corporate investors are the largest investors in VC funds while for buyout &growth funds, pension funds, banks and fund of funds are the major investors.
• Three regions (UK & Ireland, Nordic countries and France & Benelux) manage more than 83% of the amount raised in 2011.
• Regarding the sources of funds, about 65% of the total new funds raised came from European countries and about 35% from the rest of the world.

• In 2011 investments slightly increased by 6% compared to 2010 and stabilized at around €45.5bn (Industry statistics): €3.9bn for VC and €41.6bn for the buyout &growth segment.
• Even if investments made by buyout &growth funds accounted for more than 91% of the total amount, by number of companies, VC funds’ investments still represent 62% of the total with approx. 3,140 companies invested while buyout &growth funds invested in approx. 1,860 companies (Industry statistics).
• SMEs remained the core target companies by both VC funds (99% of the invested companies and 97% of the amount) and buyout &growth funds (61% of the invested companies and 21% of the amount) (Market statistics).
• The three most active sectors in terms of number of companies invested in 2011 were life sciences, computer & consumer electronics and communications. This is mainly due to substantial VC activity in those sectors. (Market statistics)
• In addition to the above sectors buyout &growth funds were also active in consumer goods & retail, business & industrial products and business & industrial services sectors. In contrast to VC, these investments were more evenly distributed by amount and number of companies across all sectors. (Market statistics)

• 2011 saw a 50% increase of the amount divested (at cost): €30bn compared to €20bn in 2010, matching the 2005 level. (Industry statistics)
• The divestment upturn was triggered by the buyout &growth funds’ activity which accounted for 92% of the total amount. (Industry statistics)
• In 2011 a lower number of companies have been divested in both VC and buyout &growth compared to 2010. Approx. 1,000 companies were divested in each of those segments. (Industry statistics)
• In terms of amount divested at cost, write-offs remained stable since 2009. This exit route continues to decrease in terms of number of companies and represents a lower share of total divestments (12.7% of the total amount at cost in 2011 compared to 20.3% in 2010 and 35.1% in 2009). (Industry statistics)
• The most realized exit routes in terms of amount divested in 2011 were trade sale and secondary sale, together representing more than 63% of the market, €18.8bn (Market statistics)
• Overall most divestments by number of companies in 2011 happened in the sectors of business & industrial products, computer & consumer electronics and consumer goods & retail. ForVC, communications and life sciences were also two important sectors for divestments as the business & industrial services sector was for the buyout & growth segment. (Market statistics)

Industry statistics: Investments/Divestments by European PE/VC firms
Market statistics: Investments/Divestments related to European portfolio companies