Divestment income rises for venture capitalists

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The Independent Online
EUROPEAN venture capitalists raised 17 per cent more from selling their investments in growing companies in 1992 than in 1991.

Most of the lift derived from an increase in public flotations of companies supported by venture capital. There were fewer individual flotations, but their combined value was double the 1991 figure.

The total realised from divestments was also boosted by more valuable trade sales, where venture capitalists sell their stakes to other companies. However, there were more write-offs of failed ventures, according to figures collated by the European Venture Capital Association and the accountancy firm KPMG Peat Marwick.

Total sales across Europe were pounds 1.83bn, compared with pounds 1.56bn in 1991. Public offering of shares raised pounds 320m, compared with pounds 150m.

European venture capitalists also increased investment, but at a slower rate than divestment. The total invested in growing companies in Europe was 1.5 per cent higher at pounds 3.67bn. UK venture capitalists, commanding 40 per cent of Europe's venture capital funds, invested pounds 1.43bn in 1992, a 6.4 per cent rise on 1991.

Investment was weaker in Continental Europe than in the UK, reflecting the later onset of recession. However, investment in German companies in 1992 was 8.3 per cent ahead.