Wide variation seen in venture returns
Monday 14 February 1994
While some groups have consistently produced rates of 20 to 30 per cent, others have been significantly negative.
The UK Venture Industry Review, published by Initiative Europe, analyses the structure of the venture capital industry and looks ahead to structural change.
It says investments made in UK funds in the 1980s were based on the promise of super-normal returns of more than 30 per cent.
Such promises were based on erroneous data about US performance and some early experience of British buyouts.
Institutions believe that they have been 'mugged' on investment terms by a number of funds and remain unconvinced about the value added by some management teams.
Despite such disenchantment, the report shows that venture capital groups in the market are seeking funds of pounds 1.25m, more than three times the amount raised in 1991 or 1992.
Only venture capital managers who add value will succeed in raising money.
The report says: 'The knell is sounding for independent fund managers who depend on intermediaries for deal flow and who cannot prove they add value through sourcing and managing exceptional deals.'
Venture capital is unpopular with many entrepreneurs. The report suggests that greater availability of long-term bank debt could have a significant impact on the venture capital market.
Looking beyond 2000, the report predicts that many institutions will come in and out of the venture capital market at exactly the wrong points in the cycle.
It forecasts that a shift in fashion in favour of venture capital will result in massive influxes and reduced performance, and that this will lead to an exodus and improved performance.
- 1 Snoop Dogg and Jared Leto buy a stake in Reddit as A-list invests $50m
- 2 Prince held a Facebook Q&A and this is the only question he answered
- 3 Car tax disc changes: Two days to go - and they affect you much more than just not displaying a piece of paper
- 4 Now we know whose fault it is if you end up being murdered in Thailand
- 5 35,000 walrus gather ashore on north-west Alaska beach 'for a rest'
Exclusive: 'Putin's Russia has been my biggest regret,' says Nato's outgoing Secretary General
The Osborne Ultimatum: Chancellor’s benefits freeze bombshell will affect ten million households
There’s no excuse for Dave Lee Travis’s behaviour, but we need to keep a sense of proportion
Should gay sex be illegal? 16% of Britons think so
Mark Reckless becomes second Tory MP to defect to Ukip in a month
Benefits 'smart cards' plan revealed by Iain Duncan Smith to stop claimants spending welfare money on alcohol
- < Previous
- Next >
iJobs Money & Business
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...
NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...
£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...
Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...