Private equity and venture capital investment exploded worldwide last year, rising by 65% in just 12 months to at least $136 billion say , Europe's leading venture capital company, and , the world's largest professional services organisation.
Venture capital investment booming worldwide
And, in a benchmark analysis - Global Private Equity 2000 - which brings together data and research from every leading capital market for the first time, 3i and PricewaterhouseCoopers report that investment is increasing at a similar or even greater rate this year.
Commenting on the new report, Antony Ross, Director of 3i in the East Region and Rob Arnold, partner at PricewaterhouseCoopers in Cambridge, point out that the huge growth of investments across Western Europe is seen in microcosm in the Cambridge region.
Antony commented: 'The stock market may be uncertain about the economy, but venture capitalists aren't. They're betting on the future.'
As the report identifies, there are 'substantial sums' available for investment. While fundraising in 1999 grew just 5% to more than $135 billion - from $129 billion in 1998 - there is a significant overhang of funds raised in previous years and there has been a real growth in corporate venturing activity and the emergence of seed capital incubators. In addition, companies like 3i have large funds of their own to invest.
Global Private Equity 2000 focuses on six key regions, highlighting the size of the US market and the significant advances made elsewhere, especially in Western Europe. It shows the strong signs of recovery in the Asia Pacific region as well as the beginnings of a buy-out market in Japan.
Looking at where the funds went, it is clear that the real winners were technology investments - at $45 billion, representing 33% of total investment, up from 29% in the previous year - and early stage investing ($22 billion), rising to 16% of the total from 11% in 1998.
Antony Ross commented: 'I expect that investment in Europe will continue its rapid growth. The economy in Europe is a similar size to the USA and it will not be long before venture capital activity matches the level of penetration achieved in the USA. I also expect the trend to continue to be towards technology and healthcare investments; the new economy entrepreneurialism which characterises the hot spots of Europe such as Cambridge, is significantly increasing company start-up activity and the availability of venture capital funds.'
Rob Arnold added: 'With the growth of the internet, globalisation of the technology and healthcare sectors and better liquidity afforded by the secondary stock markets, we are seeing ever increasing growth in the technology venture capital sector in Europe. This trend is being replicated in our own marketplace, though even greater focus is being placed on technology and healthcare investments than the European figures suggest.'
3i is a FTSE 100 company, with assets over $10 billion. It invests in ambitious, growing businesses in all sectors through its network of teams in Europe, Asia Pacific and the USA. 3i has $3.7 billion of unquoted third party funds under management to invest alongside their own funds, and invests over $8.6 million each working day. Technology businesses currently represent 40% of 3i's portfolio and in the last financial year, 3i invested in over 350 technology businesses.
The Global Technology Industry Group of PricewaterhouseCoopers works with both established global technology corporations and with fast growth technology companies from start up to IPO and beyond in providing a full range of financial, tax and legal, corporate finance and business advisory services from professionals specialising exclusively in the technology industry.