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 Rarest Beanie Baby bought for just £10 at car boot sale could be sold for £62,500 on eBay
- 2 Katie Hopkins and The Sun editor David Dinsmore reported to police for incitement to racial hatred following migrant boat column
- 3 Giorgio Armani criticises the way some gay men dress saying 'a man has to be a man'
- 4 Rebecca Francis accuses Ricky Gervais of using 'influence' to target female hunters after receiving barrage of death threats
- 5 Australian student Tommy Connolly, 23, adopts his pregnant, homeless 17-year-old cousin to give her a chance at 'a better life'
Rarest Beanie Baby bought for just £10 at car boot sale could be sold for £62,500 on eBay
Katie Hopkins and The Sun editor David Dinsmore reported to police for incitement to racial hatred following migrant boat column
'Jihadi John': Isis executioner Mohammed Emwazi wanted to wage jihad in Somalia until his friends were betrayed and killed by al-Shabaab
Parma, Missouri: 80 per cent of town's police quit after first black mayor is elected
Australian student Tommy Connolly, 23, adopts his pregnant, homeless 17-year-old cousin to give her a chance at 'a better life'
If I’m being racially abused I don’t need a stranger with a saviour complex to rescue me
The only black face in the Ukip manifesto is on the page about overseas aid
Ukip is the only main political party to not address LGBT rights in its manifesto
Food banks: One million Britons will soon be using them, according to Trussell Trust
Religion isn't growing, it is becoming vigorous in its demise, says philosopher AC Grayling
BBC election debate: The one photo that summed up the whole 90-minute leaders debate
iJobs Money & Business
£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...
£30 - 35k (DOE): Guru Careers: We are seeking a Pricing Analyst with experienc...
£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...
£21000 - £24000 per annum: Ashdown Group: The Ashdown Group has been engaged b...