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Fund size & fee level05/02/2003. Source: VCM Venture Capital Management. Stefan Herzog 
 With the declining private equity market has come another problem – venture capital funds are handing money back to investors and funds of funds are sitting on huge piles of money and still raising more. Stefan Herzog of VCM Venture Capital Management discusses the issue of too much money in the system and what needs to be done to rectify the situation.
Fund of funds fundraising is oputpacing the industry with more money being available but fewer new investment opportunities. Capital overhang is now at record levels. Funds of funds must change their capital raising strategies before the industry becomes a commodity with mediocre returns.
Copyright © 2003 VCM Venture Capital Management
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Stefan Herzog is a co-founder of VCM
VCM is an independent private equity advisory firm, which spun out of the Matuschka Group in 1991. It now has eight investment professionals based in Munich and five professionals at its US joint venture VCM Shott Private Equity Advisors in Boston and San Francisco. To date, the firm has committed more than $750m to private equity funds in Europe, the US and Asia. For more information please visit www.vcm.de
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