Britain No 1 in venture capital

EUROPEAN venture capital and private equity investment rose by 42 per cent to 9.7bn ecus in 1997, setting a fourth successive record, the European Venture Capital Association's (EVCA) annual survey showed yesterday.

The fourth successive highest total was disbursed through 6,252 investments, 10 per cent more than in 1996.

The largest absolute increase in investment was in Britain, which showed a 49 per cent increase on 1996 and disbursed 4.4bn ecu, followed by Germany with 1.3bn ecu, an 85 per cent rise, the EVCA survey said.

Consumer-related deals remained the largest sector by amount disbursed and accounted for 22 per cent of the total or 2.1bn ecu versus 1.2bn ecu in 1996.

However, technology areas increased their combined share to 24 per cent from 20 per cent previously, with over 2,100 companies attracting 2.3bn ecu worth of investment, 71 per cent more than in 1996.

Across Europe, buyouts accounted for just over 50 per cent of the total invested (46 per cent in 1996) at 4.8bn ecu and the sum invested increased by 53 per cent although the number of buyouts fell by 3 per cent.

The amount invested in seed and start-up projects increased by 23 percent and 67 per cent respectively, accounting for 7.4 per cent of the total amount invested (6.5 per cent in 1996).

Disinvestments at original cost (versus the amount actually received) were 5.8 billion ecus, up 63 per cent.

Funds raised more than doubled from the record 1996 total to 20 billion ecus, mainly from international sources which accounted for over 50 per cent of the total for the first time.

Most of the domestic increase came in Britain and Germany with the British total tripling to 12.2 billion ecus and the German advance increasing nearly eight times to 2.6 billion ecus.

Banks and pension funds were the largest sources of capital, each contributing 25 percent of the total with the later significantly increasing its input to 5 billion ecus from 1.8 billion ecus.

- Reuters