rory earley director investment and sme finance small business service
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Rory Earley Director Investment and SME Finance Small Business Service. Global Private Equity. Trends in Investment and Fund Raising PricewaterhouseCoopers and 3i. The Global View. Key Points - PowerPoint PPT PresentationTRANSCRIPT
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Rory Earley
Director Investment and SME Finance
Small Business Service
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Global Private Equity
Trends in Investment and Fund Raising
PricewaterhouseCoopers and 3i
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The Global View
Key Points• At least $155 billion of private equity and venture capital invested globally
in 2003 – increase of 43% on 2002 level of $109 billion• Equivalent to 0.48% of worlds GDP (based on 2002 GDP from World Bank Development
Indicators - $32,300 billion)
• Almost $82 billion of funds were raised globally in 2003 – down 12% from $93 billion in 2002
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Key Points• Technology investments totalled at least
$42 billion in 2003 – 27% of total investment – down 11% on 2002
• Around $19 billion was invested in expansion stages in 2003 – down 27% on 2002 levels
• Approx $118 billion invested globally in buyouts in 2003 – increase of 83% on 2002
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Investment and Fund Raising Trends
93
165
214
110 109
155133
154
262
177
93 82
0
50
100
150
200
250
300
1998 1999 2000 2001 2002 2003
Year
US
$b
Investments Funds Raised
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• Investment – compound average growth rate 10.81%
• Funds Raised – compound average growth rate –9.20%
Source – The PricewaterhouseCoopers/Venture Economics/National Venture Capital Association Money Tree Survey/Buyout Newsletter/ Private Equity Analyst/ CVCA Annual Statistical Review/EVCA Yearbook/ AVCJ Guide to Venture Capital in Asia/ Venture Equity Latin America/ SAVCA Private Equity Survey/ IVC Online
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High Technology Investment Trends
93
165
214
110 109
155
3264
121
5940 42
0
50
100
150
200
250
1998 1999 2000 2001 2002 2003
Year
US
$b
Investments High Technology
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• Investments: Compound average growth rate 10.81%
• High Technology: Compound average growth rate 5.93%
Source: The PricewaterhouseCoopers/ Venture Economics/ National Venture Capital Association Money Tree Survey/ Buyout Newsletter/ Private Equity Analyst/ CVCA Annual Statistical Review/ EVCA Yearbook/ AVCJ Guide to Venture Capital in Asia
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Expansion Investment Trends
93
165
214
110 109
155
2146
87
39 26 190
50
100
150
200
250
1998 1999 2000 2001 2002 2003
Year
US
$b
Investments Expansion
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• Investments: Compound average growth rate 10.81%
• Expansion: compound average growth rate
–1.54%
Source: The PricewaterhouseCoopers/ Venture Economics/ National Venture Capital Association Money Tree Survey/ Private Equity Analyst/ CVCA Annual Statistical Review/ EVCA Yearbook/ AVCJ Guide to Venture Capital in Asia
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Buyout Investment Trends
93
165
214
110 109
155
5583
6240
65
118
0
50
100
150
200
250
1998 1999 2000 2001 2002 2003
Year
US
$b
Investments Buyouts
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• Investments: Compound average growth rate 10.81%
• Buyouts: Compound average growth rate 16.00%
Source: The PricewaterhouseCoopers/ Venture Economics/ National Venture Capital Associate Money Tree Survey/ Buyout Newsletter/ Private Equity Analyst/ CVCA Annual Statistical Review/ EVCA Yearbook/ AVCJ Guide to Venture Capital in Asia
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North AmericaKey Points• $108.2 billion of private equity and venture capital
was invested in North America in 2003 – an increase of 67% on 2002 which had seen a decrease of 3% on 2001
• This is equivalent to 0.97% of North American GDP (based on 2002 GDP for USA and Canada from World Bank Development Indicators - £11,116bn)
• £45.3 billion funds were raised in North America in 2003 – down by 21% on 2002 levels
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Key Points• At least $27.5 billion was invested in technology
investments in North America in 2003 – up 6% on 2002 levels which were down 33% on 2001 levels
• Approx $10.4 billion was invested in expansion stages in 2003 – a decrease of 24% on 2002 which saw a decrease of 41% on 2001
• At least $89.0 billion was invested in buyouts in 2003 – up 114% from $41.6 billion in 2002 which was up 78% in 2001
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Investment and Fund Raising Trends
63.5
120.1
152
66.4 64.6
108.295.9 103.6
180.5
117.9
57.145.3
22.750.4
93.5
40.326.1 27.5
0
50
100
150
200
1998 1999 2000 2001 2002 2003
Year
US
$b
Investments Funds Raised High Technology
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• Investments: Compound average growth rate 11.25%
• High Technology: Compound average growth rate 3.96%
• Funds Raised: Compound average growth rate –13.94%
Source: The PricewaterhouseCoopers/ Venture Economics/ National Venture Capital Associate Money Tree Survey/ Buyout Newsletter/ Private Equity Analyst/ CVCA Annual Statistical Review
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Investment Trends by Stage
63.5
120.1
152
66.4 64.6
108.2
11.331.7
62.7
2413.6 10.4
41
63.541.5
23.341.6
89
020406080
100120140160
1998 1999 2000 2001 2002 2003
Year
US
$b
Investments Expansion Buyout
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• Investments: Compound average growth rate 11.25%
• Expansion: Compound average growth rate –1.80%
• Buyout: Compound average growth rate 16.75%
Source: The PricewaterhouseCoopers/ Venture Economics/ National Venture Capital Associate Money Tree Survey/ Buyout Newsletter/ Private Equity Analyst/ CVCA Annual Statistical Review
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% Stage of Investments
27 35
6582
1112
6
4
4136
221019 16 7 42 1 1
0%
20%
40%
60%
80%
100%
2000 2001 2002 2003
To
tal In
veste
d (
Billio
ns)
%
Buy out Other Late Stage Expansion
Early Stage Seed/Start-up
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• Data for North America has been created by adding Money Tree/Buyout Newsletter and CVCA data
Source: The PricewaterhouseCoopers/ Venture Economics/ National Venture Capital Associate Money Tree Survey/ Buyout Newsletter/ Private Equity Analyst/ CVCA Annual Statistical Review
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Europe
Key Points• An estimated $27.1 billion of private equity and
venture capital was invested in Europe in 2003 – a 16% decrease on 2002
• This is equivalent to 0.28% of European GDP (based on 2002 GDP for Europe as calculated using the World Bank Development Indicators - $9,568 billion)
• Approx $32.5 billion funs were raised in Europe in 2003 – up 1% on 2002 levels
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Key Points• Approx $5.7 billion was invested in expansion
stages in 2003 – decrease of 29% on 2002 which saw a decrease of 9% in 2001
• The buy-out market totalled £18.1 billion in 2003 – down 9% on 2002 which had seen an increase of 65% on 2001
• Technology investments totalled $7billion in 2003 – double 2002 levels ?
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Investment and Fund Raising Trends
16.9
29.4
41
28.532.3
27.123.829.8
56.3
46.9
32.4 32.5
4.58.3
13.38.3 7.3 7
0
10
20
30
40
50
60
1998 1999 2000 2001 2002 2003
Year
US
$b
Investments Funds Raised High Technology
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• Investments: Compound average growth rate 9.82%
• Funds Raised: Compound average growth rate 6.37%
(Source: EVCA Yearbook/ EVCA Preliminary Data
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Investment Trends by Stage
16.9
29.4
41
28.532.3
27.1
5.18.7
15.29.4 8 5.78.7
15.5 16.912.8
19.8 18.1
0
10
20
30
40
50
1998 1999 2000 2001 2002 2003
Year
US
$b
Investments Expansion Buy out
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• Investments: Compound average growth rate 9.82%
• Expansion: Compound average growth rate 2.27%
• Buy out: Compound average growth rate 15.87%
Source: EVCA Yearbook/EVCA Preliminary Data
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% stage of InvestmentsSource: EVCA Preliminary Data
42 4562 67
3 5
35
37 3325
2117 15 10 62 2 1 1
0%
20%
40%
60%
80%
100%
2000 2001 2002 2003
To
tal In
veste
d (
Billio
ns)
% Buy Out Replacement Capital Expansion Start-up Seed
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Asia PacificKey Points• A predicted $17.5 billion of private equity and
venture capital was invested in the Asia Pacific region in 2003 – a 91% increase on 2002
• Equivalent to 0.23% of Asian GDP (based on 2002 GDP calculated using the World Bank Development Database - $7,479 billion)
• Only $3.3 billion of funds raised are predicted for 2003 – up 11% on 2002 levels
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Key Points
• Technology investments in Asia Pacific totalled an estimated $7.3 billion in 2003 – up 100% on 2002 levels
• Approx $2.6 billion invested in expansion stages in 2003 – decrease of 28% on 2002
• The buy-out market totalled a record $8.9 billion in 2003 – up 454% on 2002
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Investment and Fund Raising Trends
4.9
9.1
12.3 11.29.1
17.5
7.4
16.617.9
9.9
3 3.31.8
45.6 5.2
3.7
7.3
0
5
10
15
20
1998 1999 2000 2001 2002 2003
Year
US
$b
Investments Funds Raised High Technology
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• Investments: Compound average growth rate 28.91%
• High Technology: compound average growth rate 33.17%
• Funds Raised: Compound average growth rate –14.87%
Source: AVCJ Guide to Venture Capital in Asia/ AVCJ estimates
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Investment Trends by Stage
4.9
9.1
12.3 11.29.1
17.5
2.44.1
64.6 3.7 2.6
0.4 0.8 1 2 1.6
8.9
0
5
10
15
20
1998 1999 2000 2001 2002 2003
Year
US
$b
Investments Expansion Buy out
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• Investments: Compound average growth rate 28.91%
• Expansion: Compound average growth rate 1.73%
• Buy out: Compound average growth rate 86.72%
Source: AVCJ Guide to Venture Capital in Asia/ AVCJ estimates
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% Stage of Investments Source: AVCJ Guide to Venture Capital in Asia/ AVCJ estimates
51
6
26
152
0%
20%
40%
60%
80%
100%
2003tota
l In
veste
d (
billio
ns)
%
Buy out Other
Turnarond/restructuring Expansion
Start-up/early stage
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Data Sources
North America• The PricewaterhouseCoopers/ Venture Economics/
National Venture Capital Association MoneyTree Survey www.pwcmoneytree.com
• Buyouts, a Venture Economics publication www.ventureeconomics.com
• The Private Equity Analyst, Asset Alternatives inc, Wellesley Massachusetts 781-304-1400 www.assetnews.com
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• Canadian Venture Capital Association (CVCA) Annual Statistical Review, Macdonald and associates Ltd www.cvca.ca
Europe
• European Private Equity and Venture Capital Association (EVC) Survey, PricewaterhouseCoopers and Thomson Venture Economics www.evca.com
Asia Pacific
• Asian Venture Capital Journal (AVCJ) Guide to Venture Capital in Asia and estimates from the AVCJ for 2002 www.asiafn.com
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Central/South America
• Venture Equity Latin America 2003 Year-End Report www.ve-la.com
Middle East and Africa
• The Kesselman and Kesselman PricewaterhouseCoopers MoneyTree Survey, Israel www.pwcmoneytree.com
• Israel Venture Capital Research Centre Annual Survey www.ivc-online.com
• KMPG and South African Venture Capital Association (AVCA) Private Equity Survey www.savca.co.za
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Summary
• Maturing but still very dynamic industry• Cyclicality will continue to be a problem for
funders of private equity• Technology investing has unique attributes• Future looking bright but challenging ?