Connect with us

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website. .

Top Stories

VENTURE CAPITAL FIRMS SEE THREE TIMES MORE INVESTMENT OPPORTUNITIES THAN PRIVATE EQUITY FIRMS WHO ARE TWICE AS LIKELY TO INVEST AS VCS
Investment

Published : , on

– London Set to Become Key European Investment Hub –

qodeo, a provider of financial data to the global venture community, has unveiled research that Venture Capital (VC) firms are seeing three times more investment opportunities than Private Equity (PE) firms, but despite this, PE firms are twice as likely to invest as VCs.

Early stage VCs see, on average, 900 business plans per year, and deal flow is at an historic high, given the weight of capital raised since 2012. However, ‘Time to Exit’ has extended and the UK is more risk averse than the US, at early stage investment. Less than 10 percent of UK VC & PE firms hold pre-revenue companies in their portfolios compared to 24 percent in the US.

Interviewees in the research by qodeo, in partnership with Cambridge University’s Judge Business School, highlighted:

• European VC and PE firms lacked experience in picking winners, compared to the US, and were not as ruthless at shutting down poorly performing investments.
• Withdrawal of institutional firms (banks and pension funds) from PE, driven by regulation and publicity to focus on their core activity.
• Emergence of London as a crowd-funding centre, along with the focus and competition it brings to early stage venture capital, and the consequences for risk and regulation.
• The return of corporate buyers as investors into private equity, and the innovative two-way relationships that are being built.
• The skew towards Internet based investments and warnings of a bubble developing in this area.
• Effects of enhanced levels of direct and indirect UK government help to support VCs and encourage entrepreneurial activity.
• Succession planning as the original PE firms see their founders retire and remodel their corporate culture and identity.

Simon Glass, CEO, qodeo, said: “This in-depth study of the London VC and PE market shows the resurgence of venture capital and private equity funding post the financial crisis, driven mainly by Internet based investments. This, in tandem with low interest rates and the influx of foreign capital, is set to position London as the key European hub for VC and PE investment.”

The report is available on the qodeo website, but other top line findings include:
Investment Focus – Sector & Geography:

• Every PE firm invested outside the UK but only 50% of VCs did so.
• PE firms preferred supporting management buyouts or taking majority stakes in family businesses.
• PE firms targeted a wide range of sectors including fast moving consumer goods, infrastructure, resources, consumer and business services, construction and technology.
• 43% of VC firms were solely focused on technology particularly Internet enabled businesses such as big data, cloud storage and social networks.

Deal Flow:

• PE firms said they had seen 80% of the available deals on the market that year – due to later stage firms actively marketing themselves through corporate advisors and fewer later stage PE investors.
• Proprietary deals made up less than 10% of the total deals done.
• Few VC firms saw more than 50% of available investments.
• Firms with highest ‘see rates’ reported more than four investments a year.
• PE firms saw around 3 times less deal flow than early stage VC. But when they did see a company they were about twice as likely to invest as VCs.
• VC saw an average 900 business plans a year, but invested in less than 1%.
• Some VC firms made small investments (circa £50,000) in well-publicised consumer businesses just to gain publicity rather than investment returns.

Firms interviewed included: Amadeus Capital Partners, Hoxton Ventures, Coller Capital, Reed Ventures (Reed Elsevier) and Rockpool Investments. The insights are to be discussed at a Business Breakfast at international law firm, Fried, Frank, Harris, Shriver & Jacobson LLP on Wednesday 1st October. They are part of qodeo’s ongoing in-depth global interview programme, and these latest insights covered 21 senior PE and VC professionals representing £22.5 billion under management to determine views of London’s venture industry.

Uma Rajagopal has been managing the posting of content for multiple platforms since 2021, including Global Banking & Finance Review, Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune. Her role ensures that content is published accurately and efficiently across these diverse publications.

Global Banking & Finance Review

 

Why waste money on news and opinions when you can access them for free?

Take advantage of our newsletter subscription and stay informed on the go!


By submitting this form, you are consenting to receive marketing emails from: . You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Post