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Recent Developments in the European Private Equity Markets - Kristiina Raade and Catarina Dantas Machado Rosa
Author(s): Kristiina Raade and Catarina Dantas Machado Rosa
(Directorate-General for Economic and Financial Affairs)
Recent Developments in the European Private Equity Markets - Kristiina Raade and Catarina Dantas Machado Rosa (667 kB)
This paper examines market developments in venture capital and buyout investment in Europe and the United States, through the analysis of funds raised, investments and exits. It discusses the profitability differential of European venture capital investment in comparison with the United States and suggests that it could originate in the different ways in which research is financed and the unequal supply of financing, notably from business angels, for young companies that are not sufficiently mature for venture capital financing. Investment performance measures used are the internal rate of return (IRR) and investment multiples.
The analysis covers aggregated industry returns and venture capital funds' returns aggregated by vintage year. It relies on the VentureXpert private equity and venture capital performance database, maintained by Thomson Venture Economics.
JEL classification: G10, G24
(European Economy. Economic Papers 319. April 2008.
Brussels. 39pp. Tab. Graph. Bibliogr. )
|ISBN 978-92-79-08244-3 (online)||
|ISSN 1725-3187 (online)