EUROPE - Private equity returns have "remained solid" despite a depression in the world economy, the 2003 Pan-European Investment Benchmarks Study reveals.
The research – carried out by Thomson Venture Economics – showed that final European private equity and venture capital returns last year made an annualised net pooled internal rate of return of 10.8%.
This compares to net returns of 14.2% in 2001 as recorded by the European Venture Capital Association.
Chairman of the European Private Equity and Venture Capital Association’s investor relations committee, Javier Loizaga, said that while the European private equity and venture capital industry had been clearly affected by economic conditions, it “proved its ability to generate value superior to other asset classes”.
Thomson Venture Economics European business development manager, Gemma Postlethwaite, added: “The correction in performance we’ve all seen and talked about for the last two years is not surprising given the economic climate for corporate expenditures on technology and the steep correction in the public markets.”
Pension fund investment in the European private equity market plummeted by 58% in 2002 ,or e9.2bn in 2001 to e4.3bn in 2002, according to recent data from the EVCA.
It also revealed a 31% decrease in overall fundraising, year-on-year, with banks now overtaking pension funds as the main source as capital.
As a result, Europe has been the focus of a number of initiatives to help kickstart the industry in flagging regions.
Austria’s Raiffeisen bank is to launch the country’s first private equity fund of funds vehicle in November in a bid to lure investors into the asset class.
And more recently the Greek government issued a guaranteed fund of funds vehicle investing in venture capital.
The new Dublin-domiciled vehicle called Taneo completed its e150m fundraising consisting of e45m of preference shares held by the Greek government and e105m of listed loan notes.
Businesses are experiencing auto-enrolment data error rates of up to 50%, posing questions over the reliability of pension records, Pensionsync says.
A nationwide survey of committee and local pension board members of the Local Government Pension Scheme has revealed high levels of confidence in all areas of their responsibility.
UK inflation unexpectedly rose to 2.7% in August, beating analysts' expectations of a drop to 2.4% from 2.5% the previous month.