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Recent Developments in the European Private Equity Markets

Author

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  • Kristiina Raade
  • Catarina Dantas Machado Rosa

Abstract

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.

Suggested Citation

  • Kristiina Raade & Catarina Dantas Machado Rosa, 2008. "Recent Developments in the European Private Equity Markets," European Economy - Economic Papers 2008 - 2015 319, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    • Handle: RePEc:euf:ecopap:0319
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    File URL: https://ec.europa.eu/economy_finance/publications/pages/publication12419_en.pdf
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    Citations

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    Cited by:

    1. Kraeussl, R. & Krause, S., 2011. "Has Europe Been Catching Up? An Industry Level Analysis of Venture Capital Success over 1985 - 2009," Working papers 327, Banque de France.
    2. Alkis Theonas Pitelis & Christos Pitelis, 2016. "New Roles that Key Developing Countries Will Have in the Provision of Finance for Europe," Working papers wpaper138, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    3. Roman Kraussl & Stefan Krause, 2013. "Has Europe Been Catching Up? An Industry Level Analysis of Venture Capital Success over 1985-2009," DEM Discussion Paper Series 13-6, Department of Economics at the University of Luxembourg.
    4. Kraeussl, Roman & Krause, Stefan, 2010. "Are particular industries more likely to succeed? A comparative analysis of VC investment in the US and Europe," CFS Working Paper Series 2010/02, Center for Financial Studies (CFS).

    More about this item

    Keywords

    Venture Capital; profitability; performance; IRR; Europe; United States; Raade; Dantas Machado Rosa;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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