Click here for printer friendly page

Canadian private equity investment levels down 35 per cent year on year in 2002

The amount invested in Canadian companies by private equity firms slipped to Can $2.5bn in 2002, down 35 per cent from the Can $3.8bn invested in 2001.

Although the annual figure made for disappointing reading, the most recent quarter showed some improvement. Investment activity in Q4 2002 was worth Can $754m, an jump of 51 per cent on Q3.

Brad Ashley, president of the Canadian Venture Capital Association, emphasised the positive aspects.

‘These results reflect the cautious optimism expressed by our membership,' he said. ‘There seems to be a definitive shift from solely focusing on problems within portfolios to identifying new investment opportunities - both inside the portfolio and outside of it.'

Communications and networking attracted 27 per cent of all investment, with life sciences second, attracting 19 per cent.

While the value of US private equity investment into Canada decreased by 40 per cent in 2002, its share of total capital invested remained relatively constant at 26 per cent.

‘Given the difficult environment facing the venture community in their own country, it is encouraging that US VCs are still accounting for a significant share of the activity in Canada,' said Mary Macdonald, president and CEO of Macdonald & Associates.

Copyright © 2003 AltAssets