EVCA News

European Private Equity and Venture Capital increases fundraising by 80% and investment by 6% in 2011

Thu, 10 May 2012 00:00:00 GMT

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 Fundraising • 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. Investments• 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) Divestments• 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) Note: Industry statistics: Investments/Divestments by European PE/VC firms Market statistics: Investments/Divestments related to European portfolio companies To access the raw data for Europe and its respective countries, please click here . The EVCA would like to thank all of its member firms which submitted their data for this research. Open Press Release

Reminder: Handbook of Professional Standards open for member consultation until 30 March

Mon, 19 Mar 2012 00:00:00 GMT

It is our pleasure today to submit the first fully revised draft of the EVCA Handbook of Professional Standards for member consultation. For the next two months, we invite members to review it and contact us with any feedback that they may have.Robust and comprehensive professional standards are key to mapping the future of the European private equity and venture capital industry. More than ever, we need to ensure that we not only anticipate corporate governance standards but also actively participate in shaping and implementing them. The regular review and update of our professional standards is one crucial way to do so, to ensure our standards reflect prevailing best practices in the corporate and investment worlds and offer the best possible guidance on these.With this in mind, the EVCA Professional Standards Working Group has been busy compiling a new, up-to-date and practical EVCA Handbook, making it a most useful and valuable tool for you. Last summer, we presented members with a preliminary version of the EVCA Handbook, combining the Code of Conduct, the Governing Principles and the Corporate Governance Guidelines together for the first time into one condensed document.In the next phase of the project, the Working Group focused on revising and updating the content of the EVCA Handbook, to ensure utmost accuracy and compliance with the current industry requirements. New sections have been added, including on GP communication and transparency, LP conflicts of interest, LP Advisory Committee, keyman provisions and secondary transactions.After consultation, we will seek approval of the final EVCA Handbook by EVCA's Board of Directors. The EVCA Handbook will become the only industry wide set of standards governing the relationship between GPs, LPs and portfolio companies to be authored by both limited and general partners and endorsed by all.Please note that the final version of the EVCA Handbook will also conveniently include the International Private Equity and Venture Capital (IPEV) Valuation Guidelines (already integrated in today’s version) as well as the new Reporting Guidelines. First developed by EVCA, the latter have now been transferred to the IPEV Valuation Board, of which EVCA is a founding member, for further development in an international context. They will shortly be published for consultation before becoming an integral part of the EVCA Handbook. We look forward to garnering member feedback on the EVCA Handbook. Members can send their comments to erika.blanckaert@evca.eu by 30th March, 2012. Finally, we would like to extend our thanks to the members of the EVCA Professional Standards Working Group for their outstanding efforts on behalf of all of us.

Employers, Worker And Industry Representatives: “Commission Should Reconsider Plans On Occupational Pensions”

Thu, 01 Mar 2012 00:00:00 GMT

Today the European Commission will launch a process to review European pension regulation when Michel Barnier, European Commissioner for Internal Market and Services opens a public hearing on the review of the “IORP Directive”. The European Commission aims to make important elements of the Solvency II legislation for insurance companies applicable to IORPs across Europe. This objective is repeated in the Commission’s White Paper on Pensions, which talks of a “level playing field with Solvency II”. Open Press Release Dörte Höppner’s speech at European Commission hearing

EVCA Update on Proposed Reforms to European Pension System

Wed, 15 Feb 2012 00:00:00 GMT

What is happening this week?Today: Wed February 15thThe European Insurance and Occupational Pension Authority (EIOPA) has issued their technical advice to The European Commission on a proposed review of the Institutes for Occupational Retirement Provision (IORP) Directive. This is a technical piece of advice to which the EVCA and many other organisations, including pension schemes and their associations, submitted responses to the draft on January 2nd 2012.Tomorrow: Thurs February 16th The European Commission will issue a White Paper on a series of proposed measures to: “Ensure an adequate and sustainable retirement income for EU citizens now and in the future”. This will include a commitment to review the current IORP Directive. A timeline for the review is enclosed.Quote from Klaus Bjørn Rühne, Chairman of the EVCA Limited Partners Council and Partner, ATP Private Equity Partners“Europe’s ageing population and low-growth economy have created a pensions time-bomb in Europe. The EU is right to focus on this issue but making it too costly to invest in long-term growth through say, private equity, venture capital or infrastructure is clearly not the way to defuse this bomb. In fact, by redirecting investment away from growing companies, it could make a bad situation much worse. A rigorous impact assessment is essential.”Key Points from the EVCAEVCA welcomes proposals by the European Commission to review Europe’s retirement provision. With an ageing and increasingly mobile population, it is important that Europe’s pension regime is fit for purpose.Included in the White Paper will be a proposal to review the IORP Directive. This review currently seeks to apply similar capital adequacy-based regulation to pension funds as will be applied to insurance firms under Solvency II. Solvency II rules will redirect investment towards lower return, fixed income assets such as Government bonds, away from equity and growth asset classes such as private equity and infrastructure. This is because insurers’ capital requirements must be calibrated to the value at risk, marked to market, over a 12 month period.This effect is further exacerbated by exaggerated risk weights attached to private equity, that fundamentally misinterpret the risk-reward ratio of this long-term, value-enhancing asset class.Imposing Solvency II requirements on pensions will effect occupational pension schemes abilities to meet their long-term liabilities and invest, through private equity and venture capital, in SMEs, innovation and growth.The proposals have the potential to vastly increase the cost of pension plans for millions of Europe’s employees, reduce their retirement incomes and undermine investment at a crucial time for Europe.This is why trade unions, employers, pension funds and the EVCA have all raised serious concerns and asked that the European Commission carry out a thorough impact assessment on the effect of this proposed regulation on both retirement provision and the wider effect on the economy.The next key event in the IORP Directive process will be a European Commission hearing on March 1, 2012.For IORP-D timeline, please click here For further information please contact:Emma Thorpe | Head of Communications Mobile +32 479 20 97 11 European Private Equity & Venture Capital Association Bastion Tower, Place du Champ de Mars 5, B-1050 Brussels, Belgium T +32 2 715 00 20 F +32 2 725 07 04press@evca.eu

PAE final response to the Volcker rule

Mon, 13 Feb 2012 00:00:00 GMT

The Public Affairs Executive of the EVCA has responded to proposed regulations to implement the Volcker Rule, expressing its concern that the law could prevent banks from diversifying their asset bases to include long-term investments such as private equity. Read our response

EVCA appoints Emma Thorpe as Head of Communications

Fri, 27 Jan 2012 00:00:00 GMT

The European Private Equity and Venture Capital Association (EVCA) today announces the appointment of Emma Thorpe as Head of Communications. Emma is responsible for the EVCA's public relations and membership communications and will be based in Brussels and London. Open Notice

Venture Capital Workshop - Dublin - 21 February

Mon, 23 Jan 2012 00:00:00 GMT

The next Venture Platform Workshop for EVCA members and other interested parties which will be held as a morning session on Tuesday 21 February in Dublin.This workshop is being co-organized by the Irish Venture Capital Association (IVCA) and the European Private Equity and Venture Capital Association (EVCA).As successfully organized since 2008, EVCA launches a new VC workshop series for EVCA members and other interested parties such as policymakers or regulators in the Venture Capital segment.The workshop will start at 9.00am followed by a light lunch at 12.30:Venue:NovaUCD Belfield Innovation Park, UCD Belfield Dublin 4, IrelandAgenda:08:30 Registration & networking09:00 Welcome address speech, introduction to the Workshop and debriefing of the dinner discussion (Maurice Roche, Chairman of IVCA)09:20 Overview of the fundraising environment and the attitude towards VC of the global LP Community – EVCA’s action plan to support the fundraising of its members (Georges Noël, EVCA Executive Adviser )10:30 Public initiatives in Europe (Nick Ashmore, National Pension Reserve Fund)11:00 Coffee Break11:15 Regulatory Environment for Venture Capital in Europe (Joey Mason, EVCA Member of VC Platform Council)11:45 Interactive session (Facilitators: Maurice Roche, IVCA & Georges Noël, EVCA)12:30 Light Lunch (with Incubation Companies)14:00 End of the event You will find the registration form here

EVCA warns proposed new pension fund regulation could destroy investment in long-term growth

Mon, 02 Jan 2012 00:00:00 GMT

In a response, submitted today to the European Insurance and Pensions Authority (“EIOPA”), on the proposed reform of the European pension fund system, EVCA warns of serious and significant unintended consequences, including a flight by pension funds from long-term growth asset classes such as infrastructure and private equity.

Open Press Release Open Response

EVCA comments on EU SME action plan

Wed, 07 Dec 2011 00:00:00 GMT

Today the European Commission presented its action plan for SMEs, including a proposal for regulation that, if adopted, would make it easier for managers of venture capital funds to raise capital across the EU, by introducing a tailored regime that provides them with a pan-EU fund marketing passport.

Open Statement

EVCA welcomes announcement of financing programmes for innovation and SMEs from European Commission

Wed, 30 Nov 2011 00:00:00 GMT

EVCA welcomes today's announcement from the European Commission which outlines financing facilities for innovation and SMEs under the Horizon 2020 programme and the Programme for the Competitiveness of Enterprises and SMEs (COSME). Open Press Release Horizon 2020: Commission proposes €80 billion investment in research and innovation, to boost growth and jobs€ 2.5 billions to boost business competitiveness and SMEs 2014 - 2020

Release of ESMA's advice on the Alternative Investment Fund Managers Directive

Thu, 17 Nov 2011 00:00:00 GMT

Following the release of ESMA's advice to the European Commission on the Alternative Investment Fund Managers Directive, Karsten Langer, chairman of EVCA, said:"In contrast to the rushed birth of this Directive, we have been encouraged by ESMA's diligent and professional approach to this file, both by giving occasion for industry input, as well as providing due respect to the role of national regulators."We are also encouraged by ESMA's acknowledgement of the need to tailor the rules of this broad-reaching Directive, to ensure it achieves policy goals without saddling the economy with red tape and unnecessary burden, in particular at a time when the positive influence of private equity and venture capital on economic growth is needed more than ever."There remain areas of concern, in particular around the role of depositaries, whose interference in the investment decision would be of concern to fund managers and investors alike, by upsetting the tight alignment of interests which already exists in our industry."For more information, please contact me, or Ross Butler on +32 477 52 15 53Nolwenn Pianezza | Marketing & Communications Officer