PRINT THIS PAGE

End of downturn for European VCs as corporations return to market, research predicts

Venture capitalists in Europe are on the hunt for new investments as the downturn comes to an end and corporates return to the M&A fray, according to the latest research from Ernst & Young and VentureOne. Following a year when market conditions continued to cause the pool of private venture-backed companies in Europe to contract, Ernst & Young now expects investments made by venture capitalists to climb as they see the return of large businesses looking to buy up smaller operations.

'We are now seeing a real strengthening in our markets, with increasing levels of M&A activity seen as very good news for investors avidly seeking an exit,' said Stuart Watson, head of venture capital at Ernst & Young. 'VCs will always have an eye on exit routes, if they see these routes widening, they will be more encouraged to invest in the first place.'

'During 2003, the VCs have concentrated on their star companies, letting go of some of their more disappointing investments,' Watson continued. 'Now they are in a stronger position to benefit from improvements in the M&A cycle, provide a good return to their own investors and boost their fundraising prospects.'

Copyright © 2004 AltAssets