European Private Equity & Venture Capital Association

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Executive Summary

Fundraising → Pages 7-26

• Overall fundraising decreased in 2012 by 43% to €23.6bn compared to 2011. This reduction was driven by lower activity of larger funds. In 2012 only 13 funds were raising more than €250m compared to 26 in 2011. Funds that raised in excess of €250m in 2012 dropped in total volume by 51% compared to 2011. In contrast, the volume raised by funds smaller than €250m reduced by only 25% in the same period.

• Pension funds and fund of funds accounted for almost half of all sources of funds with more than 20% each. Family offices & private individuals, government agencies and sovereign wealth funds follow as major sources with 10-12% each.

• Despite macroeconomic challenges, €8.6bn (40%) of funds raised came from institutional investors outside of Europe.

Investments → Pages 27-59

• The overall amount of €36.5bn invested in European companies in 2012 reduced by 19% compared to the previous year. This was due to the weak first half of 2012 coinciding with economic uncertainty in Europe. In contrast, the number of private equity backed companies remained stable at almost 5,000 European companies. Therefore, it was less capital intensive for the industry to invest in a constant number of companies in Europe. About 43% of the companies that received investment in 2012 were private equity backed for the first time.

• The total amount of venture capital invested reduced year on year by 14% to €3.2bn. The number of venture capital backed companies remained stable at about 2,900. For the first time more than 1,000 companies attracted growth investments despite a decrease in amount of 26% compared to 2011. Buyout investments reached €28bn. More than 800 companies received buyout investments similar to the level from 2011 although the investment amount reduced by 19%.

Divestments → Pages 61-72

• More than 2,000 European companies were exited, representing former equity investments of €22bn. While the number of companies remained stable the amount divested at cost decreased by 29%.

• Of all exited companies in 2012 venture capital represented almost 50% and growth 23%. Their typical exits included trade sale, sale to another private equity firm and write-off. Buyout related exits attributed 85% of equity amount divested at cost. This presents a decline of 26%. Prominent exit routes were trade sale, sale to another private equity firm and public offering.

• Initial Public Offering (IPO) levels remained very low. Only three buyout and five venture capital investments were able to take this exit route.

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European Private Equity & Venture Capital Association

  1. 1. 2012 Pan-European Private Equity and Venture Capital Activity Activity Data on Fundraising, Investments and Divestments
  2. 2. European Private Equity & Venture Capital Association The EVCA is the voice of European private equity. Our membership covers the full range of private equity activity, from early-stage venture capital to the largest private equity firms, investors such as pension funds, insurance companies, fund of funds and family offices and associate members from related professions. We represent 650 member firms and 500 affiliate members. The EVCA shapes the future direction of the industry, while promoting it to stakeholders such as entrepreneurs, business owners and employee representatives. We explain private equity to the public and help shape public policy, so that our members can conduct their business effectively. The EVCA is responsible for the industry’s professional standards, demanding accountability, good governance and transparency from our members and spreading best practice through our training courses. We have the facts when it comes to European private equity, thanks to our trusted and authoritative research and analysis. The EVCA has 25 dedicated staff working in Brussels to make sure that our industry is heard. 2012 Pan-European Private Equity and Venture Capital Activity | Creating lasting value | 3
  3. 3. Disclaimer Version Presentation as of 26/4/2013 Disclaimer The information contained in this report has been produced by the EVCA, based on PEREP_Analytics data and third party information. While the EVCA has made every effort to ensure the reliability of the data included in this report, EVCA cannot guarantee the accuracy of the information collected and presented. Therefore, the EVCA cannot accept responsibility for any decision made or action taken based upon this report or the information provided herein. This presentation is for the exclusive use of the persons to whom it is addressed and is intended for general information purposes only. It is not intended to constitute legal or other professional advice and should not be treated as such. Appropriate legal advice must be sought before making any decision, taking any action or refraining from taking any action in reliance on the information contained in this presentation. The EVCA does not assume any responsibility for any person’s reliance upon the information contained herein. In furnishing this presentation, the EVCA undertakes no obligation to provide any additional information or to update this presentation or any additional information or to correct any inaccuracies which may become apparent. Unless otherwise specified, this presentation is confidential and may not be distributed, published, reproduced or disclosed to any other person or used for any other purpose, without the written permission of the EVCA. Copyright information No part of this publication may be reproduced by any process except in accordance with the provisions of the Copyright Act 1968. Copyright enquiries should be directed to the EVCA, Tel: + 32 2 715 00 20. © Copyright EVCA May 2013 2012 Pan-European Private Equity and Venture Capital Activity | Creating lasting value | 4
  4. 4. Executive Summary More data on www.evca.eu – Research & Data Fundraising → Pages 7-26 • Overall fundraising decreased in 2012 by 43% to €23.6bn compared to 2011. This reduction was driven by lower activity of larger funds. In 2012 only 13 funds were raising more than €250m compared to 26 in 2011. Funds that raised in excess of €250m in 2012 dropped in total volume by 51% compared to 2011. In contrast, the volume raised by funds smaller than €250m reduced by only 25% in the same period. • Pension funds and fund of funds accounted for almost half of all sources of funds with more than 20% each. Family offices & private individuals, government agencies and sovereign wealth funds follow as major sources with 10-12% each. • Despite macroeconomic challenges, €8.6bn (40%) of funds raised came from institutional investors outside of Europe. Investments → Pages 27-59 • The overall amount of €36.5bn invested in European companies in 2012 reduced by 19% compared to the previous year. This was due to the weak first half of 2012 coinciding with economic uncertainty in Europe. In contrast, the number of private equity backed companies remained stable at almost 5,000 European companies. Therefore, it was less capital intensive for the industry to invest in a constant number of companies in Europe. About 43% of the companies that received investment in 2012 were private equity backed for the first time. • The total amount of venture capital invested reduced year on year by 14% to €3.2bn. The number of venture capital backed companies remained stable at about 2,900. For the first time more than 1,000 companies attracted growth investments despite a decrease in amount of 26% compared to 2011. Buyout investments reached €28bn. More than 800 companies received buyout investments similar to the level from 2011 although the investment amount reduced by 19%. Divestments → Pages 61-72 • More than 2,000 European companies were exited, representing former equity investments of €22bn. While the number of companies remained stable the amount divested at cost decreased by 29%. • Of all exited companies in 2012 venture capital represented almost 50% and growth 23%. Their typical exits included trade sale, sale to another private equity firm and write-off. Buyout related exits attributed 85% of equity amount divested at cost. This presents a decline of 26%. Prominent exit routes were trade sale, sale to another private equity firm and public offering. • Initial Public Offering (IPO) levels remained very low. Only three buyout and five venture capital investments were able to take this exit route. 2012 Pan-European Private Equity and Venture Capital Activity | Creating lasting value | 5
  5. 5. Overview - Fundraising, Investments & Divestments € billion 2000–2012 - Industry statistics - Amount 120 112 100 80 80 80 72 73 71 60 55 48 40 47 40 37 35 28 28 24 27 29 30 27 9 13 11 42 37 33 31 27 25 20 20 47 43 22 19 14 14 24 20 22 12 0 2000 2001 2002 2003 2004 2005 Funds Raised 2006 Investments 2007 2008 2009 2010 2011 2012 Divestments EVCA Statistics explained: For the purpose of a longer time series this graph shows “industry statistics” capturing activity by location of the private equity firm. In the following presentation most statistics on investments and divestments are reported as “market statistics” to focus on the impact of portfolio companies in Europe that are backed by private equity. This data is only available since 2007. Source: Thomson Reuters / EVCA (2000-2006) & EVCA / PEREP_Analytics (2007-2012) 2012 Pan-European Private Equity and Venture Capital Activity | Creating lasting value | 6
  6. 6. Fundraising Fundraising statistics explained • Direct private equity investment funds that primarily focus on investments in Europe are monitored. • Funds raised are recorded in the country of the advisory team that is raising/managing the fund (“industry statistics”). • The funds included in the statistics are: private equity funds making direct private equity investments, mezzanine private equity funds, co-investment funds and rescue/turnaround funds. • The following funds are excluded from the statistics: infrastructure funds, real estate funds, distress debt funds, primary funds-of-funds, secondary funds-of-funds. More data on www.evca.eu – Research & Data
  7. 7. Glossary – Fundraising Fund stage focus Type of investors • Early-stage fund: A venture capital fund focused on investing in companies in their primary development stage. • Corporate investor: Corporations that deliver non-financial products and services. • Later-stage fund: A venture capital fund focused on investing in later-stage companies in need of expansion capital. • • Balanced fund: A venture capital fund focused on both early-stage and development, with no particular concentration on either. Endowment: An institution that is bestowed money (and possibly other assets) via a donation with the stipulation to invest it and use the gains for specific objectives so that the principal remains intact. • Family office: An office that provides investment management and other financial services to one or several families. • Foundations: A non-profit organisation through which private wealth is contributed and distributed for public or charitable purposes. • Mezzanine fund: A fund that provides (generally subordinated) debt to facilitate the financing of buyouts, frequently alongside a right to some of the equity upside. Fund of funds: A private equity fund that primarily takes equity positions in other funds. • Generalist fund: A fund with either a stated focus of investing in all stages of private equity investment, or with a broad area of investment activity. Government agencies: Country, regional, governmental and European agencies or institutions for innovation and development (including structures such as the EBRD or EIF). • Other asset manager: Financial institutions (other than bank, endowment, family office, foundation, insurance company or pension fund) managing a pool of capital by investing it across asset classes to generate financial returns. • • • • Growth fund: Funds whose strategy is to invest in relatively mature companies that are looking for capital to expand or restructure operations. Buyout fund: A fund whose strategy is predominantly to acquire controlling stakes in established companies. Independent and captive funds • Captive funds: Funds that are 100% owned by the parent organisation • Pension funds: A pension fund that is regulated under private or public sector law. • Independent funds: Semi-captive funds (those in which the parent owns less than 100%) as well as wholly independent funds. • Sovereign wealth funds: State-owned investment fund managing a pool of money derived from a country's reserves. NB: In the following presentation, unclassified figures concerning the type of investors have been extrapolated. Fundraising | Creating lasting value | 8
  8. 8. 2012 Fundraising at a glance € billion Incremental amounts raised during the year 90 80 70 79.6 11.4 • Overall fundraising decreased in 2012 by 43% to €23.6bn compared to 2011. This reduction was driven by lower activity of larger funds. In 2012, only 13 funds were raising more than €250m compared to 26 in 2011. Funds that raised more than €250m in 2012 dropped in total volume by 51% compared to 2011. The volume raised by funds smaller than €250m reduced only by 25% in the same period. 80.5 3.6 5.8 • Pension funds and fund of funds accounted for almost half of all sources of funds with over 20% each. Family offices & private individuals, government agencies and sovereign wealth funds follow as major sources with 10-12% each. Despite the macroeconomic challenges, €8.6bn (40%) of funds raised came from institutional investors outside of Europe. 1.3 60 50 40 41.6 58.6 64.8 4.4 30 18.9 20 8.3 6.3 1.1 3.3 10.8 3.7 2007 2008 10 0 5.1 23.6 21.8 2.6 2.6 26.9 0.4 3.1 16.5 13.4 5.2 3.6 2009 2010 2011 2012 Buyout Venture Capital 3.2 Growth Other* Total • Venture capital accounted for 15% of total fundraising compared to 12% in 2011, beating with € 3.6bn raised the 2010 fundraising low of the past five years. 102 venture capital funds raised new capital in 2012 compared to 152 in 2011. For the fourth year running government agencies attributed a new high of 40% to venture capital fundraising coming from 33% in 2011. • Buyout fundraising reduced by 39%. The €16.5bn raised presented a €10bn drop compared to the previous year, while still covering 70% of all fundraising. This can be attributed to the strong fundraising year of 2011 which saw 81 funds successfully raising new capital. Eight of these funds in 2011 were taking up more than €1bn. In 2012, 68 funds raised capital with only 3 reaching more than €1bn. • Growth fundraising reached only 9% of its 2011 level. Only 15 funds raised new capital compared to 32 in the previous year. Key Figures 2012 All Private Equity Venture Capital** Buyout** Growth** Incremental amounts raised €23.6bn €3.6bn €16.5bn €0.4bn Incremental number of funds 239 102 68 15 €19.8bn €1.5bn €13.8bn €0.5bn 30 30 Final closings - Cumulative amount since inception Final closings – Number of funds 96 *Other includes Mezzanine and Generalist funds Source: EVCA / PEREP_Analytics Fundraising 6 ** Relates to fund focus | Creating lasting value | 9
  9. 9. Funds raised by fund stage focus € billion 9 € billion 2007–2012 - Incremental amount raised during the year 8.3 70.3 64.8 60.3 58.6 8 7 50.3 3.2 6.3 6.0 6 5 2.5 4.4 1.2 2.2 3.7 4 40.3 5.3 5.2 3.6 30.3 3.7 3.6 26.9 3.2 3 1.5 1.3 1.6 1.6 2 1 1.0 2.3 1.3 0.6 2.0 1.8 2.0 0.2 0.4 3.8 2.8 2.6 0.7 2.0 13.4 1.7 10.8 1.1 0.9 10.3 0.4 1.0 0 Venture Capital 16.5 2.2 2.0 1.1 20.3 2.6 Growth capital Mezzanine 0.3 Generalist Buyout Balanced Later-stage Early-stage 2007 2008 2009 2010 2011 2012 Source: EVCA / PEREP_Analytics Fundraising | Creating lasting value | 10
  10. 10. Funds raised by fund stage focus 2007–2012 – Number of funds that reach first, intermediary or final closing during the year 200 196 180 160 200 180 165 69 152 148 160 134 140 140 66 120 58 60 27 17 80 120 100 20 18 80 39 60 80 72 17 56 11 57 82 70 74 60 46 20 26 52 24 23 28 77 81 68 60 40 32 15 21 11 10 12 12 20 8 0 Venture Capital 78 60 100 40 135 102 57 100 160 Growth capital Mezzanine Generalist Balanced 0 Buyout Later-stage Early-stage 2007 2008 2009 2010 2011 2012 NB: Also contains funds that only reported capital gains as fundraising Source: EVCA / PEREP_Analytics Fundraising | Creating lasting value | 11
  11. 11. Funds raised by type of investor 80% 2007–2012 - Incremental amount raised during the year - % of total amount 70% 35% Academic inst. / Endowments / Foundations 60% Banks 30% Capital markets 50% 25% Corporate investors 40% 20% Family offices & Private individuals 15% Fund of funds & Other asset managers 30% 10% Government agencies 20% 5% Insurance companies 10% Pension funds 0% 2007 2008 2009 2010 2011 2012 Sovereign wealth funds € billion 0% 100 2007 78.5 2008 80.4 2009 2010 2011 2012 41.1 50 18.6 2009 2010 23.6 21.8 New funds raised (excluding capital gains) 0 2007 2008 2011 2012 Source: EVCA / PEREP_Analytics Fundraising | Creating lasting value | 12
  12. 12. Venture funds raised by type of investor 80% 2007–2012 - Incremental amount raised during the year - % of total amount 70% 45% Academic inst. / Endowments / Foundations 60% 40% Banks 35% Capital markets 50% 30% Corporate investors 40% 25% Family offices & Private individuals 20% Fund of funds & Other asset managers 30% 15% Government agencies 10% 20% Insurance companies 5% Pension funds 10% 0% 2007 2008 2009 2010 2011 2012 Sovereign wealth funds 0% € billion 10 2007 8.2 2008 2009 2010 2011 6.2 5 2012 5.2 3.6 3.2 2009 2010 3.6 New funds raised (excluding capital gains) 0 2007 2008 2011 2012 Source: EVCA / PEREP_Analytics Fundraising | Creating lasting value | 13
  13. 13. Buyout funds raised by type of investor 80% 2007–2012 - Incremental amount raised during the year - % of total amount 70% 45% Academic inst. / Endowments / Foundations 60% 40% Banks 35% Capital markets 50% 30% Corporate investors 25% 40% Family offices & Private individuals 20% Fund of funds & Other asset managers 30% 15% 10% Government agencies 5% Insurance companies 20% 0% 10% Pension funds 2007 2008 2009 2010 2011 2012 Sovereign wealth funds € billion 0% 100 2007 2008 58.1 2009 2010 2011 2012 64.8 50 26.9 10.6 13.4 2009 2010 16.5 New funds raised (excluding capital gains) 0 2007 2008 2011 2012 Source: EVCA / PEREP_Analytics Fundraising | Creating lasting value | 14
  14. 14. Growth funds raised by type of investor 80% 2007–2012 - Incremental amount raised during the year - % of total amount 70% 80% Academic inst. / Endowments / Foundations 60% 70% Banks 60% 50% Capital markets 50% Corporate investors 40% Family offices & Private individuals 30% 30% Fund of funds & Other asset managers 20% Government agencies 10% Insurance companies 40% 20% Pension funds 10% 0% 2007 2008 2009 2010 2011 € billion 0% 5 2007 2008 3.6 2009 2010 2011 4.4 2012 2012 2.6 1.2 Sovereign wealth funds New funds raised (excluding capital gains) 1.1 0.4 0 2007 2008 2009 2010 2011 2012 Source: EVCA / PEREP_Analytics Fundraising | Creating lasting value | 15
  15. 15. Funds raised by type of investor 2012 - Incremental amount raised during the year - % of amount All Private Equity funds Venture funds 0.7% 7.5% 1.5% 11.7% 3.1% 1.5% 4.9% 1.5% 8.1% 4.5% 5.3% 5.3% 0.7% 239 funds 7.7% 191 firms 22.1% 12.3% 4.5% 102 funds 6.5% 89 firms 14.2% 9.3% 8.5% 10.1% 8.8% 14.9% 8.0% 1.7% 14.9% 1.0% 8.0% 1.7% 27.4% 1.7% 1.0% 1.8% 4.5% 39.7% 1.8% 4.5% Family offices Fund of funds Growth funds Government agencies 0.3% 11.1% 2.3% Insurance companies 2.8% 2.0%5.1% 10.2% 8.5% Other asset managers 1.9% Pension funds 68 funds Private individuals 15 funds 61 firms 16.9% 37.3% 27.4% Capital markets Endowments and foundations 1.0% 16.9% Buyout funds Banks Corporate investors 1.7% 1.0% Academic institutions 14 firms 31.3% Sovereign wealth funds 2.3% 10.2% 8.5% 6.5% 1.6% Source: EVCA / PEREP_Analytics Fundraising | Creating lasting value | 16
  16. 16. Concentration of capital % total amount of annual fundraising 2007–2012 – Incremental fundraising by amount bracket per fund during the year 70% Number of funds 14 60% 50% 8 14 4 40% 30% 266 14 29 20% 5 36 10% 0% 15 40 70 347 2007 13 47 305 4 252 193 42 14 9 27 1 33 269 3 2008 2009 2010 <€100m €100 - 250m €250 - 500m €500 - 1bn 4 4 2011 >€1bn 5 2012 Source: EVCA / PEREP_Analytics Fundraising | Creating lasting value | 17
  17. 17. Funds raised by type of investor & region of the fund 2012 - Incremental amount raised during the year 100% 0.2% 0.0% 0.9% 0.0% 1.3% 0.0% 8.7% 90% 12.4% 20.5% 21.1% 26.8% 12.8% Pension funds 9.3% 80% Sovereign wealth funds 13.8% 15.8% Insurance companies 6.7% 2.6% Government agencies 8.6% 18.7% 3.8% 70% 29.4% 13.6% 3.9% 60% 29.7% 50% Capital markets 23.2% 0% 3.1% Banks 34.6% 17.3% 20% 3.6% 4.3% 1.8% 60.7% 22.5% 24.4% 1.2% Family offices & Private individuals Corporate investors 1.8% 30% 10% 26.8% 18.6% 23.8% 10.2% 40% Fund of funds & Other asset managers 0.0% 2.7% UK & Ireland Source: EVCA / PEREP_Analytics 0.0% 8.6% 3.9% DACH 5.4% 3.6% 6.4% Academic inst. / Endowments / Foundations 7.2% 0.2% 0.0% 1.5% Nordics 13.2% 0.0% 1.3% 5.3% 0.7% 1.1% 0.4% 0.0% France & Benelux Southern Europe CEE DACH: Austria, Germany, Switzerland Southern Europe: Greece, Italy, Portugal, Spain Fundraising Nordics: Denmark, Finland, Norway, Sweden CEE: Central Eastern Europe | Creating lasting value | 18
  18. 18. Funds raised by country of management & country of origin (LP country) € billion 2012 - Incremental amount raised during the year 16 14 13.4 12 10 8 6 4.7 3.7 4 2.3 2.6 1.7 2 1.6 1.9 0.6 0.6 0.5 0.0 UK & Ireland DACH Nordics France & Benelux by country of management Source: EVCA / PEREP_Analytics Southern Europe CEE by country of origin DACH: Austria, Germany, Switzerland Southern Europe: Greece, Italy, Portugal, Spain Fundraising Nordics: Denmark, Finland, Norway, Sweden CEE: Central Eastern Europe | Creating lasting value | 19
  19. 19. Funds raised by country of management € billion 2007-2012 - Incremental amount raised during the year 90 80 1.2 6.3 70 11.3 60 50 7.9 6.7 4.0 1.3 11.8 9.7 6.0 1.8 0.8 40 8.6 30 20 46.2 8.5 47.7 4.1 4.0 1.5 2.4 6.6 10 0 2007 2008 UK & Ireland Source: EVCA / PEREP_Analytics 1.5 0.5 6.9 1.9 2.1 0.3 Nordics NB: Include capital gains as fundraising 17.7 8.9 2009 DACH 4.3 2010 France & Benelux 2011 Southern Europe 0.6 0.5 4.7 1.6 2.6 13.5 2012 CEE DACH: Austria, Germany, Switzerland Nordics: Denmark, Finland, Norway, Sweden Southern Europe: Greece, Italy, Portugal, Spain CEE: Central Eastern Europe Fundraising | Creating lasting value | 20
  20. 20. Fundraising geographic breakdown 2012 (2011) - Source of funds - % of total amount 9.1% North America 25.2% (9.8%) (20.0%) 10.8% (17.2%) 8.0% (9.1%) 17.4% 0.1% (0.9%) (12.0%) Rest of World 1.5% 2.9% (0.2%) (3.7%) Other Western Europe 11.9% Source: EVCA / PEREP_Analytics Australia Asia 13.1% (14.5%) (12.7%) Fundraising | Creating lasting value | 21
  21. 21. Venture Capital - Fundraising geographic breakdown 2012 (2011) - Source of funds - % of total amount 17.5% North America 4.5% (8.5%) (1.6%) 10.1% (15.1%) 10.7% (31.7%) 34.5% 0.8% (2.4%) (28.0%) Rest of World 0.4% 4.9% (0.0%) (4.9%) Other Western Europe 16.2% Source: EVCA / PEREP_Analytics Australia Asia 0.3% (1.3%) (6.6%) Fundraising | Creating lasting value | 22
  22. 22. Buyout - Fundraising geographic breakdown 2012 (2011) - Source of funds - % of total amount 7.4% North America 31.3% (12.2%) (28.2%) 11.7% (7.8%) 7.8% (4.9%) 11.1% 0.0% (0.3%) (8.7%) Rest of World 2.0% 2.6% (0.1%) (3.0%) Other Western Europe 10.7% Source: EVCA / PEREP_Analytics Australia Asia 15.3% (19.2%) (15.6%) Fundraising | Creating lasting value | 23
  23. 23. Funds raised by fund stage focus € billion 5.0 4.8 € billion 2007–2012 - Final closing during the year - Amount 4.7 58.9 60 53.8 50 4.5 4.0 1.6 4.0 40 3.5 3.0 2.7 0.5 2.1 0.9 2.7 0.3 2.1 1.4 0.9 1.5 1.4 0.3 1.0 0.2 0.8 0.8 0.5 13.3 1.1 0.1 1.0 17.7 1.4 1.3 1.2 1.6 1.1 20 1.6 1.5 1.4 0.7 0.5 0.0 30 2.3 2.0 1.0 2.9 0.6 2.5 1.5 3.3 3.1 1.4 0.7 10 13.8 10.0 0.5 0.5 Venture Capital 0 Growth capital Mezzanine Generalist Buyout Balanced Later-stage Early-stage 2007 2008 2009 2010 2011 2012 Source: EVCA / PEREP_Analytics Fundraising | Creating lasting value | 24
  24. 24. Funds raised by fund stage focus 2007–2012 - Final closing during the year - Number of funds 90 90 80 80 70 70 60 50 83 59 60 54 49 17 70 50 50 45 20 40 8 22 30 20 10 24 25 30 8 5 5 12 6 18 20 20 9 34 26 39 40 16 9 6 6 30 30 22 3 5 4 4 20 10 5 0 Venture Capital 25 12 6 12 23 16 14 12 23 24 41 Growth capital Mezzanine Generalist 0 Buyout Balanced Later-stage Early-stage 2007 2008 2009 2010 2011 2012 Source: EVCA / PEREP_Analytics Fundraising | Creating lasting value | 25
  25. 25. Concentration of capital % total amount of cumulative fundraising until final closing 2007–2012 - Final closing during the year - Amount & Number of funds 80% Number of funds 70% 14 60% 12 50% 2 5 40% 2 30% 3 20% 10 37 14 13 48 17 81 2007 2008 10% 0% 9 4 17 28 39 69 6 21 74 6 18 7 10 4 77 63 2011 2012 79 <€100m 2009 €100 - 250m €250 - 500m 2010 €500 - 1bn >€1bn Source: EVCA / PEREP_Analytics Fundraising | Creating lasting value | 26
  26. 26. Investments Investments statistics explained • Industry statistics are an aggregation of figures according to the country of the private equity firm’s office in charge of the investment. At European level, this relates to investments made by European private equity firms regardless of the location of the target company. • Market statistics are an aggregation of figures according to the location of the portfolio company. At European level, this relates to investments in European companies regardless of the location of the private equity firm. • Equity value: The amount of capital invested to acquire shares in an enterprise. The equity value includes equity, quasiequity, mezzanine, unsecured debt and secured debt provided by the firm. More data on www.evca.eu – Research & Data
  27. 27. Glossary – Investment Stages • Venture Capital • Seed: Financing provided to research, assess and develop an initial concept before a business has reached the start-up phase. • Start-up: Financing provided to companies for product development and initial marketing. Companies may be in the process of being set up or may have been in business for a short time, but have not sold their product commercially. • Later-stage venture: Financing provided for the expansion of an operating company, which may or may not be breaking even or trading profitably. Later-stage venture tends to finance companies already backed by venture capital firms. • Growth: A type of private equity investment – most often a minority investment but not necessarily – in relatively mature companies that are looking for capital to expand or restructure operations, enter new markets. • Buyout: Financing provided to acquire a company. It may use a significant amount of borrowed money to meet the cost of acquisition. • Rescue/Turnaround: Financing made available to an existing business, which has experienced trading difficulties, with a view to re-establishing prosperity. • Replacement capital: The purchase of a minority stake of existing shares in a company from another private equity firm or from another shareholder or shareholders. Investments | Creating lasting value | 28
  28. 28. 2012 Investments at a glance 50 6.7 6.7 40 38.4 38.4 40 30 30 1,299 1,299 20 20 10 10 00 1,161 1,161 593 593 348 348 6.0 6.3 2007 2007 2008 2008 Buyout - Amount VC - Amount Buyout - No. of companies Other - Amount Growth - No. of companies Key Figures € billion € billion € billion € billion 3,667 4.3 4.3 57.2 3,339 53.4 57.2 3,339 6 70 60 60 703,155 4,000 70 70 3,6673,667 3,039 3,155 4.3 4.3 3,039 3,3393,339 3,500 3,500 2,965 2,923 3,1553,155 2,965 3,039 3,000 2,923 3,039 2,9652,965 3,000 57.257.2 53 53 44.9 4 41.9 50 6.7 4 6.7 5.2 5.2 19% compared to the previous year. This was due to the weak first half of 2012 coinciding with economic uncertainty in Europe. 4,000 4,000 Number of companies financed 60 50 4,000 3,667 Number of companies financed 70 60 69.8 6 Number ofof companies financed Number companies financed Investments – Market statistics – Amount & No. of companies • Overall €36.5bn was invested in European companies in 2012 with a decrease of 70 4,500 • The number of private equity backed companies remained stable at almost 5,000 European companies. Therefore, it was less capital intensive for the industry to 3,500 3,500 invest in a constant number of companies in Europe. About 43% of the companies 2,9232,923 3,000 3,000 that received investments in 2012 were private equity backed for the first time. 2,500 • The total amount of venture capital invested decreased year on year by 14% to 45 2,500 45 2,500 2,500 42 42 €3.2bn. The number of venture backed companies remained stable at about 36.5 3 2,000 5.2 36 2,900. Start-up stage investments accounted for the majority of venture capital 6.3 6.338.438.4 36 5.2 34.5 40 40 2,000 34.5 3.8 2,000 2,000 3.8 6.3 6.3 activity by amount and number of companies (56-60%). Life sciences, computer & 34.534.5 29.7 3.8 3.8 28.0 24.3 1,500 28.0 consumer electronics, communications and energy & environment accounted for 1,500 29.7 30 30 24 24 29.7 1,2991,299 1,500 28.028.0 1,500 1,047 1,047 994 1,1611,161 4 three quarters of all venture capital investments. 994 932 932 1,0471,047 5.1 994 994 932 932 1,000 1,000 • For1,000 first time more than 1,000 companies attracted growth investments the 20 20 5.1 775 5.1 5.1 1,000 775 50 881 881 615 783 593 593 615 783 10 12.7 1012.7 348 348 878 775 775 878 500 881 881 500 615 615 783 783 despite a decrease in amount of 26% compared to 2011. Almost two thirds were in business & industrial products and services, computer & consumer electronics, 500 500 consumer services, energy and environment and life sciences. 878 878 12.712.7 3.7 3.7 3.2 0 6 0 6 6 4 4 4 4 4 4 3 More than 800 companies received buyout investments similar to the 2011 level 0 • 3 0 0 02009 2010 2011 2012 2009 2011 2012 2007 20082008 20092009 2010- Amount 2011 20122012 2010 2011 2007 - Amount Growth VC although the investment amount reduced by 19% to €28bn. Buyout investments 3.8 6 Buyout - Amount Growth VC - Amount VC - Amount - No. of companies Total - Amount OtherOther - Amount - Amount VC - No. of companies Growth of companies Growth - No. - No. of companies Growth - Amount Buyout - Amount Buyout VC - No. of companies - Amount Buyout - No. of companies TotalTotal - Amount - Amount broadly concentrate Growth - Amount Growth - Amount VC of companies VC - No. - No. of companies and life sciences. 2012 across sectors of business & industrial products and services, electronics, consumer goods and retail, consumer services computer & of companies Buyout of companies Buyout - No. - No. consumer All Private Equity Venture Capital* Buyout* Growth* €36.5bn €3.2bn €28.0bn €3.8bn Investments – Number of companies (Market statistics) 4,975 2,923 878 1,047 Number of firms involved (Market statistics) 1,004 556 428 329 Number of funds involved (Market statistics) 1,687 952 607 511 Investments – Amount (Market statistics) Source: EVCA / PEREP_Analytics * Relates to the investment stage of the portfolio company Investments | Creating lasting value | 29
  29. 29. Investments by stage focus Quarterly trend Q1 2007 – Q4 2012 - Market statistics - Amount € billion 18 16 14 12 10 8 6 4 2 0 Q1 Q2 Q3 Q4 2007 Q1 Q2 Q3 2008 Q4 Q1 Q2 Q3 Q4 Q1 2009 Q2 Q3 2010 Q4 Q1 Q2 Q3 Q4 Q1 2011 Venture Capital Q2 Q3 Q4 2012 Buyout Growth Source: EVCA / PEREP_Analytics Investments | Creating lasting value | 30
  30. 30. Investments by stage focus Quarterly trend Q1 2007 – Q4 2012 - Market statistics - Number of companies 1,400 1,200 1,000 800 600 400 200 0 Q1 Q2 Q3 Q4 2007 Q1 Q2 Q3 2008 Q4 Q1 Q2 Q3 Q4 Q1 2009 Q2 Q3 2010 Q4 Q1 Q2 Q3 Q4 Q1 2011 Venture Capital Q2 Q3 Q4 2012 Buyout Growth Source: EVCA / PEREP_Analytics Investments | Creating lasting value | 31
  31. 31. Venture Capital - Investments by stage focus € million Quarterly trend Q1 2007 – Q4 2012 - Market statistics - Amount 1,200 1,000 800 600 400 200 0 Q1 Q2 Q3 Q4 2007 Q1 Q2 Q3 Q4 Q1 2008 Q2 Q3 Q4 Q1 2009 Seed Q2 Q3 Q4 Q1 2010 Start-up Q2 Q3 2011 Q4 Q1 Q2 Q3 Q4 2012 Later-stage venture Source: EVCA / PEREP_Analytics Investments | Creating lasting value | 32
  32. 32. Venture Capital - Investments by stage focus Quarterly trend Q1 2007 – Q4 2012 - Market statistics - Number of companies 700 600 500 400 300 200 100 0 Q1 Q2 Q3 Q4 2007 Q1 Q2 Q3 2008 Q4 Q1 Q2 Q3 Q4 Q1 2009 Seed Q2 Q3 Q4 Q1 2010 Start-up Q2 Q3 2011 Q4 Q1 Q2 Q3 Q4 2012 Later-stage venture Source: EVCA / PEREP_Analytics Investments | Creating lasting value | 33
  33. 33. Investments by stage focus € billion € billion 2007–2012 - Market statistics - Amount 8 60 57.2 50 7 6.3 6.0 6 0.3 0.2 40 34.5 5 2.4 2.3 3.8 4 3.7 1.9 0.1 20 1.8 5.2 1.8 5.1 28.0 3.2 4.3 1.8 3.6 3.5 12.7 3.8 10 1 0 0.2 6.3 3 29.7 30 3.7 0.1 0.1 6.7 2 38.4 1.9 1.6 0.5 2008 Later-stage venture Start-up 1.7 1.0 0.5 2009 Seed 1.8 1.7 0.7 0.3 2007 2.0 1.8 2010 Growth 0.5 2011 Rescue/Turnaround 1.3 1.1 0.4 2012 Replacement capital 0 2007 2008 2009 2010 2011 2012 Buyout Venture Capital Source: EVCA / PEREP_Analytics Investments | Creating lasting value | 34
  34. 34. Investments by stage focus 2007–2012 - Market statistics - Number of companies 4,000 3,500 4,000 3,667 3,339 527 3,500 3,155 500 3,039 2,965 2,923 392 353 371 3,000 3,000 393 2,500 2,500 1,796 1,528 2,000 2,000 1,724 1,711 1,679 1,796 1,500 1,500 1,000 1,161 1,000 1,151 500 348 2008 Later-stage venture 150 176 68 174 52 140 990 994 775 593 2007 783 881 878 615 1,513 1,413 0 1,299 Start-up 2009 Seed 132 135 2010 Growth 500 1,047 839 939 932 103 76 2011 Rescue/Turnaround 67 118 2012 Replacement capital 0 2007 2008 2009 2010 2011 2012 Buyout Venture Capital Source: EVCA / PEREP_Analytics Investments | Creating lasting value | 35
  35. 35. Buyout - Investments by stage focus / equity split 2007–2012 - Market statistics - Amount & Number of companies 60 1,200 50 1,000 40 800 30 600 20 400 10 € billion 1,400 200 0 Number of companies 70 0 2007 2008 Buyout < €150m (Amount) Buyout < €150m (Number of companies) 2009 2010 Buyout > €150m (Amount) Buyout > €150m (Number of companies) 2011 2012 Growth (Amount) Growth (Number of companies) Source: EVCA / PEREP_Analytics Investments | Creating lasting value | 36
  36. 36. Investments by stage focus 2012 - Market statistics - % of Amount & Number of companies % of Amount % of Number of companies Seed Start-up 4.9% 0.4% Seed Later-stage venture 3.4% Buyout 17.2% Seed 6.9% Start-up Growth capital 10.4% Rescue/ Turnaround 1.0% Replacement capital 3.0% Later-stage Replacement capital venture 2.3% Growth capital Rescue/ Turnaround 1.3% Rescue/ Turnaround Start-up 35.2% Replacement capital Growth capital Buyout 20.5% Buyout 76.8% Later-stage venture 16.5% Venture Capital Buyout Growth Venture Capital Buyout Growth €3.2bn €28bn €3.8bn 2,923 Companies 878 Companies 1,047 Companies Source: EVCA / PEREP_Analytics Investments | Creating lasting value | 37
  37. 37. Investments by stage focus & regions 2012 - Market statistics - Amount € billion € billion 9 1.2 8.1 8 6.9 7 1 0.8 6 0.8 0.8 0.0 0.0 0.7 5.6 5 0.1 1.1 0.5 0.5 0.4 0.8 0.4 3.9 4 0.4 0.6 0.0 3 2.8 0.8 0.3 0.2 0.4 0.2 0.4 0.4 0.0 0.3 0.3 0.1 0.1 UK & Ireland France & Benelux Later-stage venture Start-up DACH Seed 0.4 0.1 0.0 0.1 0 0.4 0.1 0.2 0.1 0.1 Southern Europe Growth 2 0.0 0.0 Nordics Rescue/Turnaround 0.1 0.0 0.2 0.1 0.0 0.0 0.0 0.7 0 CEE Replacement capital Buyout Venture Capital Source: EVCA / PEREP_Analytics 1 DACH: Austria, Germany, Switzerland Southern Europe: Greece, Italy, Portugal, Spain Investments Nordics: Denmark, Finland, Norway, Sweden CEE: Central Eastern Europe | Creating lasting value | 38
  38. 38. Investments by stage focus & regions 2012 - Market statistics - Number of companies 1000 931 900 217 800 700 657 500 400 300 506 426 17 400 430 333 319 300 295 200 217 26 410 200 325 242 227 100 120 109 0 58 569 17 600 11 15 UK & Ireland 29 37 France & Benelux Later-stage venture Start-up 158 11 21 DACH Seed 36 183 71 8 24 Southern Europe Growth 123 18 74 74 7 Nordics Rescue/Turnaround 12 100 31 58 1 9 173 139 91 123 33 0 CEE Replacement capital Buyout Venture Capital Source: EVCA / PEREP_Analytics DACH: Austria, Germany, Switzerland Southern Europe: Greece, Italy, Portugal, Spain Investments Nordics: Denmark, Finland, Norway, Sweden CEE: Central Eastern Europe | Creating lasting value | 39
  39. 39. Investments by region 2012 - Industry vs. Market statistics - Amount By location of private equity firm Nordics 11% By location of portfolio company CEE 2% Nordics 14% CEE 3% UK & Ireland 28% Southern Europe 8% UK & Ireland 43% Southern Europe 10% DACH 16% DACH 23% France & Benelux 20% Source: EVCA / PEREP_Analytics DACH: Austria, Germany, Switzerland Southern Europe: Greece, Italy, Portugal, Spain Investments France & Benelux 22% Nordics: Denmark, Finland, Norway, Sweden CEE: Central Eastern Europe | Creating lasting value | 40
  40. 40. Geographic investment flows 2012 - Industry vs. Market statistics - Amount Market statistics €0.8bn are an aggregation of figures according to the location of the portfolio company. At European level, this relates to investments in European companies regardless of the location of the private equity firm. Non-European private equity firms investing in portfolio companies in Europe €1.2bn €8.3bn European private equity firms investing in portfolio companies outside Europe Cross-border investments within Europe €27.4bn Industry statistics are an aggregation of figures according to the country of the private equity firm’s office in charge of the investment. At European level, this relates to investments made by European private equity firms regardless of the location of the target company. Domestic investments in European countries Source: EVCA / PEREP_Analytics Investments Europe includes: Austria, Baltic countries (Estonia, Latvia, Lithuania), Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, Netherlands, Norway, Other CEE (Bosnia-Herzegovina, Croatia, Macedonia, Montenegro, Serbia, Slovenia, Slovakia), Poland, Portugal, Romania, Spain, Sweden, Switzerland, Ukraine, United Kingdom | Creating lasting value | 41
  41. 41. Venture Capital - Geographic investment flows 2012 - Industry vs. Market statistics - Amount Market statistics €210m are an aggregation of figures according to the location of the portfolio company. At European level, this relates to investments in European companies regardless of the location of the private equity firm. Non-European private equity firms investing in portfolio companies in Europe €369m €610m European private equity firms investing in portfolio companies outside Europe Cross-border investments within Europe €2,365m Industry statistics are an aggregation of figures according to the country of the private equity firm’s office in charge of the investment. At European level, this relates to investments made by European private equity firms regardless of the location of the target company. Domestic investments in European countries Source: EVCA / PEREP_Analytics Investments Europe includes: Austria, Baltic countries (Estonia, Latvia, Lithuania), Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, Netherlands, Norway, Other CEE (Bosnia-Herzegovina, Croatia, Macedonia, Montenegro, Serbia, Slovenia, Slovakia), Poland, Portugal, Romania, Spain, Sweden, Switzerland, Ukraine, United Kingdom | Creating lasting value | 42
  42. 42. Investments as % of GDP 2000–2012 - Industry statistics - % of GDP %of GDP 0.60% 0.60% 0.55% 0.50% 0.40% 0.42% 0.41% 0.38% 0.35% 0.33% 0.30% 0.28% 0.34% 0.29% 0.26% 0.25% 0.20% 0.20% 0.10% 0.00% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: Thomson Reuters Datastream (GDP) / Thomson Reuters / EVCA (2000-2006) & EVCA / PEREP_Analytics (2007-2012) Investments | Creating lasting value | 43
  43. 43. Investments as % of GDP 2012 - Industry statistics 1.000% 0.834% 0.000% 0.011% 0.016% 0.019% 0.029% 0.037% 0.052% 0.054% 0.078% 0.104% 0.134% 0.137% 0.140% 0.142% 0.144% 0.164% 0.200% 0.194% 0.219% 0.220% 0.248% 0.253% 0.264% 0.400% 0.283% 0.600% 0.482% 0.800% 0.558% % of GDP 1.200% 0.000% 2012 2007-2011 Annual Average *Other CEE consists of Ex-Yugoslavia and Slovakia Source: Thomson Reuters Datastream (GDP) / EVCA / PEREP_Analytics Investments | Creating lasting value | 44
  44. 44. Venture Capital - Investments as % of GDP 2012 - Industry statistics 0.140% 0.120% 0.118% 0.000% 0.000% 0.000% 0.000% 0.000% 0.001% 0.002% 0.004% 0.008% 0.009% 0.020% 0.010% 0.018% 0.021% 0.024% 0.025% 0.027% 0.030% 0.030% 0.032% 0.041% 0.038% 0.040% 0.044% 0.060% 0.053% 0.080% 0.067% 0.100% 0.072% % of GDP 0.160% 0.000% 2012 2007-2011 Annual Average *Other CEE consists of Ex-Yugoslavia and Slovakia Source: Thomson Reuters Datastream (GDP) / EVCA / PEREP_Analytics Investments | Creating lasting value | 45
  45. 45. Buyout - Investments as % of GDP 1.000% 0.900% 0.800% 0.706% % of GDP 2012 - Industry statistics 0.700% 0.000% 0.000% 0.008% 0.008% 0.010% 0.010% 0.012% 0.022% 0.035% 0.055% 0.058% 0.087% 0.090% 0.100% 0.106% 0.108% 0.137% 0.148% 0.148% 0.150% 0.163% 0.171% 0.200% 0.180% 0.300% 0.201% 0.400% 0.330% 0.500% 0.400% 0.600% 0.000% 2012 2007-2011 Annual Average *Other CEE consists of Ex-Yugoslavia and Slovakia Source: Thomson Reuters Datastream (GDP) / EVCA / PEREP_Analytics Investments | Creating lasting value | 46
  46. 46. Growth - Investments as % of GDP 2012 - Industry statistics % of GDP 0.200% 0.180% 0.160% 0.140% 0.100% 0.088% 0.120% 0.000% 0.000% 0.001% 0.003% 0.003% 0.004% 0.007% 0.008% 0.011% 0.013% 0.020% 0.017% 0.019% 0.020% 0.021% 0.023% 0.027% 0.028% 0.033% 0.034% 0.036% 0.041% 0.043% 0.036% 0.040% 0.052% 0.060% 0.053% 0.080% 0.000% 2012 2007-2011 Annual Average *Other CEE consists of Ex-Yugoslavia and Slovakia Source: Thomson Reuters Datastream (GDP) / EVCA / PEREP_Analytics Investments | Creating lasting value | 47
  47. 47. Investments as % of GDP 2012 - Market statistics 1.400% 1.200% 0.018% 0.020% 0.033% 0.042% 0.066% 0.069% 0.084% 0.086% 0.103% 0.125% 0.137% 0.153% 0.159% 0.200% 0.190% 0.211% 0.226% 0.244% 0.247% 0.258% 0.260% 0.312% 0.352% 0.400% 0.369% 0.600% 0.373% 0.800% 0.530% 1.000% 0.602% % of GDP 1.600% 0.000% 2012 2007-2011 Annual Average *Other CEE consists of Ex-Yugoslavia and Slovakia Source: Thomson Reuters Datastream (GDP) / EVCA / PEREP_Analytics Investments | Creating lasting value | 48
  48. 48. Venture Capital - Investments as % of GDP 0.100% 0.090% 0.080% 0.000% 0.000% 0.001% 0.002% 0.002% 0.002% 0.003% 0.005% 0.010% 0.010% 0.020% 0.011% 0.011% 0.021% 0.021% 0.023% 0.024% 0.025% 0.027% 0.029% 0.032% 0.033% 0.029% 0.030% 0.038% 0.040% 0.041% 0.050% 0.054% 0.060% 0.054% 0.070% 0.065% % of GDP 2012 - Market statistics 0.000% 2012 2007-2011 Annual Average *Other CEE consists of Ex-Yugoslavia and Slovakia Source: Thomson Reuters Datastream (GDP) / EVCA / PEREP_Analytics Investments | Creating lasting value | 49
  49. 49. Buyout - Investments as % of GDP % of GDP 2012 - Market statistics 1.200% 1.000% 0.000% 0.012% 0.012% 0.018% 0.035% 0.056% 0.063% 0.063% 0.064% 0.067% 0.067% 0.076% 0.106% 0.142% 0.152% 0.173% 0.179% 0.200% 0.211% 0.215% 0.309% 0.285% 0.193% 0.200% 0.316% 0.400% 0.421% 0.600% 0.515% 0.800% 0.000% 2012 2007-2011 Annual Average *Other CEE consists of Ex-Yugoslavia and Slovakia Source: Thomson Reuters Datastream (GDP) / EVCA / PEREP_Analytics Investments | Creating lasting value | 50
  50. 50. Growth - Investments as % of GDP % of GDP 2012 - Market statistics 0.300% 0.250% 0.200% 0.150% 0.000% 0.000% 0.003% 0.003% 0.005% 0.008% 0.008% 0.009% 0.012% 0.012% 0.019% 0.020% 0.020% 0.021% 0.024% 0.027% 0.027% 0.033% 0.036% 0.038% 0.039% 0.041% 0.051% 0.045% 0.050% 0.053% 0.060% 0.100% 0.000% 2012 2007-2011 Annual Average *Other CEE consists of Ex-Yugoslavia and Slovakia Source: Thomson Reuters Datastream (GDP) / EVCA / PEREP_Analytics Investments | Creating lasting value | 51
  51. 51. Investments by sector focus 2012 - Market statistics - % of Amount & Number of companies 0% Agriculture 2% 4% 6% 8% 10% 12% 18% 20% 12.4% 12.5% Business & industrial services 10.9% 8.3% Chemicals and materials 2.5% 4.9% 9.0% Communications 12.1% 8.1% Computer & consumer electronics 17.0% 2.1% 1.8% Construction Consumer goods & retail Consumer services 9.5% 9.0% 5.9% 4.9% Energy and environment Financial services 1.5% 15.2% 7.7% 4.3% 14.9% Life sciences 0.5% 16.9% 1.7% 2.1% 1.6% Transportation Unclassified 16% 0.3% 0.8% Business & industrial products Real estate 14% 0.3% 1.2% Amount Number of companies Source: EVCA / PEREP_Analytics Investments | Creating lasting value | 52
  52. 52. Investments by sector focus 2007-2012 - Market statistics - Amount All Private Equity Venture Capital 7 € billion € billion 80 70 60 50 6 5 4 40 3 30 2 20 10 1 0 0 2007 2008 2009 2010 2011 2007 Buyout 2009 2010 2011 2012 2008 2009 2010 2011 2012 Growth 8 € billion 60 € billion 2008 2007 2012 50 40 7 6 5 4 30 3 20 2 10 1 0 0 2007 2008 2009 2010 2011 2012 Source: EVCA / PEREP_Analytics Investments | Creating lasting value | 53
  53. 53. Investments by sector focus 2007-2012 - Market statistics - Number of companies All Private Equity Venture Capital 4,000 6,000 3,500 5,000 3,000 4,000 2,500 2,000 3,000 1,500 2,000 1,000 1,000 500 0 0 2007 2008 2009 2010 2011 2007 Buyout 2008 2009 2010 2011 2012 2007 2012 2008 2009 2010 2011 2012 Growth 1,400 1,200 1,200 1,000 1,000 800 800 600 600 400 400 200 200 0 0 2007 2008 2009 2010 2011 2012 Source: EVCA / PEREP_Analytics Investments | Creating lasting value | 54
  54. 54. Initial / Follow-on investments 2012 - Market statistics - % of Number of companies 44% 47% 54% 55% 57% 57% Follow-on investment for the company Initial investment for the company 56% 62% 53% 55% 43% 2007 2008 50% 2009 60% 58% 45% 2010 46% 2011 57% Initial investment for the private equity firm 43% 2012 Source: EVCA / PEREP_Analytics Investments | Creating lasting value | 55
  55. 55. Investments by number of employees 2012 - Market statistics - % of Number of companies All Private Equity 3.6% 0.8% Venture Capital 4.1% 1.1% 0.2% 0.1% 0.3% 0.0% 4.4% 5.6% 2.6% 9.3% 29.2% 43.0% 65.0% 30.8% Buyout 3.9% 3.1% Growth 4.4% 14.5% 25.7% Full-time equivalent staff by interval 0 - 19 4.6% 0.9% 20.6% 8.8% 4.6% 20 - 99 10.9% 42.8% 100 - 199 200 - 249 250 - 499 15.6% 500 - 999 17.4% 17.4% Source: EVCA / PEREP_Analytics 7.1% 1000 - 4999 40.6% 5000 + Investments | Creating lasting value | 56
  56. 56. Venture Capital - Investments by number of employees 1,600 1,400 1,403 Amount invested 1,412 2,000 Number of companies 1,800 1,600 1,200 1,400 1,000 1,200 800 1,000 600 Number of companies € million 2012 - Market statistics - Amount & Number of companies 800 600 400 307 400 200 7 0 0 - 19 20 - 99 100 - 199 30 24 2 0 200 - 249 250 - 499 500 - 999 1000 - 4999 200 5000 + Amount invested Number of companies 98% 0 99% SME % Full-time equivalent staff by interval Source: EVCA / PEREP_Analytics Investments | Creating lasting value | 57
  57. 57. Buyout - Investments by number of employees 12,000 250 Amount invested Number of companies 10,000 9,588 200 8,000 150 6,000 4,743 4,000 2,025 2,000 0 4,317 3,963 2,011 Number of companies € million 2012 - Market statistics - Amount & Number of companies 100 50 1,258 84 0 0 - 19 20 - 99 100 - 199 200 - 249 Amount invested Number of companies 19% 250 - 499 53% SME % 500 - 999 1000 - 4999 5000 + Full-time equivalent staff by interval Source: EVCA / PEREP_Analytics Investments | Creating lasting value | 58
  58. 58. Growth - Investments by number of employees 2012 - Market statistics - Amount & Number of companies € million 450 1,125 Amount invested 968 1,000 400 Number of companies 350 800 300 250 600 523 360 400 200 200 338 Number of companies 1,200 150 324 100 137 50 33 0 0 0 - 19 20 - 99 100 - 199 200 - 249 Amount invested 81% 500 - 999 1000 - 4999 5000 + Number of companies 68% 250 - 499 SME % Full-time equivalent staff by interval Source: EVCA / PEREP_Analytics Investments | Creating lasting value | 59
  59. 59. Divestments Divestments statistics explained • Industry statistics are an aggregation of figures according to the country of the private equity firm’s office in charge of the divestment. At European level, this relates to divestments made by European private equity firms regardless of the location of the target company. • Market statistics are an aggregation of figures according to the location of the portfolio company. At European level, this relates to divestments of European companies regardless of the location of the private equity firm. • Divestment amounts (including write-offs) are recorded at cost (i.e. the total amount divested is equal to the total amount invested before). More data on www.evca.eu – Research & Data
  60. 60. Glossary – Divestment Stages • Public offering: the sale or distribution of a company’s shares to the public for the first time by listing the company on the stock exchange, also includes sale of quoted shares after a lock-up period. • Repayment of principal loans: If a private equity firm provided loans or purchased preference shares in the company at the time of the investment, then their repayment according to the amortisation schedule represents a decrease of the financial claim of the firm into the company, and hence a divestment. • Repayment of silent partnership: A silent partnership is a type of mezzanine financing instrument. It is similar to a longterm bank loan but, in contrast to a loan, a silent partnership is subject to a subordination clause, so that in the event of insolvency all other creditors are paid before the silent partner. The company has to repay the partnership and has to pay interest and possibly a profit-related compensation. The subordination clause gives the capital the status of equity despite its loan character. This financing instrument is frequently used in Germany. • Sale to another private equity firm: The sale of company shares to another direct private equity firm. • Sale to financial institution: The sale of company shares to banks, insurance companies, pension funds, endowments, foundations and other asset managers other than private equity firms. • Trade sale: The sale of company shares to industrial investors. • Write-off: The total or partial write-down of a portfolio company’s value to zero or a symbolic amount (sale for a nominal amount) with the consequent exit from the company or reduction of the shares owned. The value of the investment is eliminated and the return to investors is a full or partial loss. Divestments | Creating lasting value | 62
  61. 61. 2012 Divestments at a glance Divestments – Market statistics – No. of companies by exit route Buyout Growth Venture Capital Initial public offering 5 44 Sale of quoted equity 242 51 3 32 10 41 Write-off 243 Repayment silent partnership 102 91 29 199 72 46 Repayment of principal loans 65 165 Sale to another PE firm 51 Sale to financial institution 77 Sale to management 33 Other means • Divestments from venture capital investments represented almost 50% of all exited companies in 2012. However, they only accounted for 9% of the amount divested at cost. The most prominent exit routes for venture backed companies were trade sale, write-off and sale to another private equity firm. 149 Trade sale 159 • Buyout related exits represented 85% of equity amount divested at cost and 27% by number of companies. The total amount divested reduced by 26% to €18.3bn. With 566 companies exited, buyout divestments reduced by only 13%. Trade sale, sale to another private equity firm and sale of quoted equity were the most prominent exit routes. • Growth exits represented 5% of equity amount divested at cost and 23% by number of companies. The total amount divested reduced by 51% to €1.2bn, while the number of companies exited increased by 32% to 475. Trade sale, sale to another private equity firm and write-off were the most prominent exit routes. 35 16 5 59 35 21 18 • IPO levels remained very low. Only 3 buyout and 5 venture capital investments were able to take this exit route. Key Figures 2012 • More than 2,000 European companies were exited, representing former equity investments of €21.7bn. While the number of companies remained stable the amount divested at cost decreased by 29%. All Private Equity Venture Capital* Buyout* Growth* €21.7bn €1.9bn €18.3bn €1.2bn 2,074 999 566 475 Number of firms involved (Market statistics) 571 272 298 133 Number of funds involved (Market statistics) 1,006 480 490 182 Divestments – Amount at cost (Market statistics) Divestments – Number of companies (Market statistics) Source: EVCA / PEREP_Analytics * Relates to the investment stage Divestments | Creating lasting value | 63
  62. 62. Divestments at cost – Venture Capital / Buyout / Growth 35 1,600 30 1,400 2.4 25 20 3.2 1,000 2.0 1.9 1.2 2.1 800 2.1 15 10 1,200 2.3 Number of companies € billion 2007–2012 - Market statistics - Amount & Number of companies 20.4 5 2.4 0.7 600 24.8 2.1 1.1 18.3 400 14.5 10.4 200 7.5 0 0 2007 2008 2009 2010 2011 2012 Buyout - Amount divested Growth - Amount divested Venture Capital - Amount divested Buyout - Number of companies Growth - Number of companies Venture Capital - Number of companies Source: EVCA / PEREP_Analytics Divestments | Creating lasting value | 64
  63. 63. Divestments at cost by exit route 2007–2012 – Market statistics - Amount at cost € billion 12 10 8 6 4 2 0 2007 2008 2009 2010 2011 2012 Trade sale Initial public offering Sale of quoted equity Write-off Repayment of silent partnerships Repayment of principal loans Sale to another private equity firm Sale to financial institution Sale to management Other means Source: EVCA / PEREP_Analytics Divestments | Creating lasting value | 65
  64. 64. Divestments at cost by exit route 2007–2012 - Market statistics - Number of companies 700 600 500 400 300 200 100 0 2007 2008 2009 2010 2011 2012 Trade sale Initial public offering Sale of quoted equity Write-off Repayment of silent partnerships Repayment of principal loans Sale to another private equity firm Sale to financial institution Sale to management Other means Source: EVCA / PEREP_Analytics Divestments | Creating lasting value | 66
  65. 65. Divestments at cost by exit route – Venture Capital / Buyout / Growth 2012 - Market Statistics - % of Amount 2.2% 3.2% 1.5% 38.2% 26.0% 4.1% Buyout €18.3bn 8.8% 4.7% 4.4% 5.1% 36.7% 16.8% 0.7% 6.8% Trade sale 1.6% 2.1% 6.4% 35.7% 14.8% Venture Capital €1.9bn 1.6% 4.6% Growth €1.2bn 13.6% Initial public offering 4.1% 4.4% 0.3% 4.7% 4.7% Sale of quoted equity Write-off 36.7% 16.8% 24.4% 1.6% Repayment of silent partnerships Repayment of principal loans 0.3% 4.7% Source: EVCA / PEREP_Analytics 6.1% 6.9% 12.9% Sale to another private equity firm 2.1% 24.4% 0.0% 4.9% Sale to financial institution Sale to management Other means Divestments | Creating lasting value | 67
  66. 66. Divestments at cost by exit route – Venture Capital / Buyout / Growth 2012 - Market Statistics - % of Number of companies 3.6% 10.1% 25.4% 2.7% Buyout 3.2% 5.0% 7.0% 0.5% 6.4% 4.3% 12.3% Venture Capital 4.1% 4.4% 2.0% 4.9% Trade sale 23.7% 10.4% 0.0% 1.0% 7.1% 9.4% 999 Companies 4.7% 3.7% 7.1% 5.5% 28.1% 15.6% 7.5% 10.0% 0.5% 566 Companies Growth 18.6% 475 Companies Initial public offering Sale of quoted equity Write-off 23.8% 36.7% 16.8% 1.6% Repayment of silent partnerships Repayment of principal loans Sale to another private equity firm 2.1% 0.3% 4.7% 24.4% Source: EVCA / PEREP_Analytics 40.6% Sale to financial institution Sale to management Other means Divestments | Creating lasting value | 68
  67. 67. Divestments at cost by sector 4,500 400 353 4,000 3,500 3,895 350 3,262 3,161 3,000 248 250 2,500 211 2,254 198 159 1,710 2,000 1,500 1,810 150 109 1,017 42 37 15 Source: EVCA / PEREP_Analytics 404 135 Amount at cost 100 79 66 500 200 140 1,213 1,000 0 300 Number of companies exited € million 2012 - Market statistics - Amount & Number of companies (excluding write-offs) 483 337 31 25 17 12 23 19 50 0 Number of companies exited Divestments | Creating lasting value | 69
  68. 68. Divestments at cost by sector – Venture Capital / Buyout / Growth 2012 - Market statistics - Amount (excluding write-offs) Buyout Growth Venture Capital 0.5% Agriculture 0.1% 1.3% 17.3% 18.6% Business & industrial products 4.8% 1.7% 1.6% Chemicals & materials 9.3% 8.5% Business & industrial services Communications 16.1% 6.9% 1.0% 21.3% 2.3% 7.4% 8.6% Computer & consumer electronics 29.7% 0.3% Construction 0.5% 3.6% 16.7% 14.1% Consumer goods & retail 5.7% 5.1% Consumer services 2.6% Energy & environment 8.4% Financial services 7.1% 1.0% 11.3% 2.1% 1.3% 10.7% Life sciences 20.8% 0.0% 0.7% 0.1% Real estate Transportation Unclassified 10.2% 13.5% 0.0% 1.5% 1.5% 3.9% 0.1% 0.2% Source: EVCA / PEREP_Analytics Divestments | Creating lasting value | 70
  69. 69. Divestments at cost by sector – Venture Capital / Buyout / Growth 2012 - Market statistics - Number of companies (excluding write-offs) Buyout Growth Venture Capital 0.9% Agriculture 0.6% 1.3% 20.4% Business & industrial products 19.1% 11.1% Business & industrial services 5.7% 5.3% 4.1% Communications 11.9% Computer & consumer electronics 19.7% 1.0% 9.5% 2.5% Construction 5.0% Consumer services 5.4% Energy & environment 0.7% Financial services 13.6% 5.4% 3.2% 1.0% Real estate 0.8% Transportation 1.2% Unclassified 18.1% 8.1% 5.4% 2.3% 1.8% Life sciences 18.3% 11.5% 4.9% Consumer goods & retail 5.2% 13.8% 4.2% 3.1% Chemicals & materials 4.2% 25.6% 6.6% 9.1% 0.4% 0.5% 2.5% 3.1% 0.9% 1.5% Source: EVCA / PEREP_Analytics Divestments | Creating lasting value | 71
  70. 70. Divestments at cost by region € billion 2012 - Industry vs. Market statistics - % of Amount 12 10.5 10 8 6 5.4 4.6 4.5 4.1 4 3.3 3.3 2.7 2.3 2 1.4 1.1 0.3 - UK & Ireland DACH Nordics France & Benelux Industry statistics - Country of the private equity firm Source: EVCA / PEREP_Analytics Southern Europe CEE Market statistics - Country of portfolio company DACH: Austria, Germany, Switzerland Southern Europe: Greece, Italy, Portugal, Spain Divestments Nordics: Denmark, Finland, Norway, Sweden CEE: Central Eastern Europe | Creating lasting value | 72
  71. 71. Acknowledgements We are grateful for the generous support of General Partners representing private equity and venture capital firms across Europe who provided us with their activity data. The following comprehensive and verified pan-European statistics would not be possible without their on-going commitment. We also thank all the regional and national private equity associations that collect their activity data via PEREP_Analytics, the pan-European statistic platform. We thank the following associations for their participation to make PEREP_Analytics the most comprehensive private equity database on private equity in Europe: APCRI (Portugal), AVCO (Austria), BVA (Belgium), BVK (Germany), CVCA (Croatia), CVCA (the Czech Republic), DVCA (Denmark), EstVCA (Estonia), FVCA (Finland), HVCA (Hungary), IVCA (Ireland), LTVCA (Lithuania), NVCA (Norway), NVP (the Netherlands), PSIK (Poland), SECA (Switzerland), SEEPEA (South Eastern Europe), SLOVCA (Slovakia) and SVCA (Sweden). 2012 Pan-European Private Equity and Venture Capital Activity | Creating lasting value | 74
  72. 72. About PEREP_Analytics and EVCA Research • The overall coverage rate of all European private equity firms was 64% based on 1,883 eligible private equity firms. In terms of capital under management, the 2012 annual survey covered 89% of the total European market (base €534bn). • PEREP is a joint Pan-European statistics platform of the following private equity associations: APCRI (Portugal), AVCO (Austria), BVA (Belgium), BVK (Germany), CVCA (Croatia), CVCA (the Czech Republic), DVCA (Denmark), EstVCA (Estonia), EVCA (Europe), FVCA (Finland), HVCA (Hungary), IVCA (Ireland), LTVCA (Lithuania), NVCA (Norway), NVP (the Netherlands), PSIK (Poland), SECA (Switzerland), SEEPEA (South Eastern Europe), SLOVCA (Slovakia), SVCA (Sweden). PEREP_Analytics Staff EVCA Research Staff Statistics Manager Dan Magirescu Head of Research Dr Cornelius Mueller Analyst Team Adriana Andronic Andreea Banica Monica Biolan Alina Ciucardel Raluca Coroi Cristina Cristea Laura Dumitrascu Iuliana Furica Adelina Stefan Andrei Teslici Ioana Turbatu Email: info@perepanalytics.eu Web: www.perepanalytics.eu Research Manager Julien Krantz Email: research@evca.eu Web: www.evca.eu 2012 Pan-European Private Equity and Venture Capital Activity | Creating lasting value | 75
  73. 73. EVCA European Private Equity and Venture Capital Association Bastion Tower Place du Champ de Mars 5 B – 1050 Brussels – Belgium www.evca.eu Tel: +32 2 715 00 20

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