26 / 04 / 2013 LAATST BEWERKT 16 / 10 / 13 15:41

NVP publishes new 2012 market data ''Enterprising Capital''

SIGNIFICANTLY LOWER PRIVATE EQUITY AND VENTURE CAPITAL INVESTMENTS BY DUTCH FUNDS IN 2012, BUT STILL AN IMPORTANT FUNDING SOURCE FOR SMEs

• INVESTMENT LEVEL DROPPED TO €1.3bn IN 2012
• 88% OF NUMBER OF INVESTMENTS TARGETED AT SMEs
• HARDLY ANY LARGE TRANSACTIONS
• OVER €150m OF VENTURE CAPITAL TO START-UPS
• PRIVATE INDIVIDUALS AND FAMILY OFFICES INVESTED MORE IN PRIVATE EQUITY AND VENTURE CAPITAL

Investments by Dutch private equity and venture capital funds dropped from €2.1bn in 2011 to €1.3bn in 2012, primarily because no large transactions were seen. In 2012, €841m worth of investments were sold or otherwise divested against €1.6bn in 2011. A total of €1.3bn of new funds were raised.

The number of companies invested in dropped less significantly and is comparable to previous years: 326 companies in 2012 and 359 companies in 2011.

Bulk of activity in SMEs, few large transactions

In 88% of cases, less than €5m of equity was invested. Typical for an SME with less than €10m of turnover and fewer than 100 employees. This capital flow to SMEs has remained relatively stable over the years.

Only three transactions of more than €50m took place in 2012. However several large buyouts were announced in 2012 that will be realised in 2013.

About 77% of total investments by Dutch funds in 2012 was domestic, slightly less than 2011 when this was 86%. Other European countries received 21% of investments and the rest of the world 3%.

€153m to Young companies, important role for ROMs

Dutch venture capitalist invested €153m in 2012 in 185 young companies whereas in 2011 this was €186m in 191 companies. Of note is the role Regional Development Funds (Regionale Ontwikkelingsmaatschappijen, ROMs) play by being responsible for 47% of the number of venture investments. In 2012 they invested €31m in 117 companies, of which 87 were venture deals.

Ample exit possibilities, relatively high number of write-offs

Dutch private equity and venture capital funds divested €841m out of the sale of 187 portfolio companies in 2012, significantly less than 2011 when €1.6bn came from the sale of 128 companies. The most important exit route was through the sale to a strategic buyer with 41% (€349m) of total divestments.

A relatively high amount was written off. A total of €247m, or 29% of total divestments, was written off (at investment cost) in the sale of 45 portfolio companies. In 2011 this was 1.3% and 4.6% in 2010 4.6% but still far from the top of 2009 when this was 49%. These high write-offs are mainly explained by several large write-offs abroad.

Fund raising in line with previous years

In 2012 a total of €1.3bn of new funds were raised which is, except for the peak in 2011, in line with previous years.

A remarkable trend is that private individuals have invested more and more in Dutch private equity and venture capital funds, both through family offices and as informal investors.

The NVP has for years concentrated attention on the worrying state of later stage venture fund raising. The establishment of the DVI (Dutch Venture Initiative) by the Ministry of Economic Affairs and the EIF (European Investment Fund) is a positive development that will surely support a recovery in venture fund raising.

Outlook

Many Dutch private equity and venture capital funds are focussed on SMEs and start-ups, something they will keep on doing. Several large transactions are already announced for 2013 and will surely impact the amount invested positively.

Many private equity and venture capital funds have an ample supply of capital and are seeking new investments. Finding the right valuations will however be difficult in this uncertain economic climate.

The relevance of private equity and venture capital as an alternative financing source for companies will surely grow, especially considering the difficulties companies face in securing bank financing.

Download the full report here and here (including October 2013 erratum). Get the full 2012 data here and the trend data here.

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Note to the editor

The NVP is the Dutch private equity and venture capital association. For more information please contact NVP director Tjarda Molenaar (+31 20 571 22 70) or www.nvp.nl.

The full report ‘’Enterprising Capital: the Dutch private equity and venture capital market in 2012’’ is available through our website, as well as more detailed data for academic research.

About ‘’Enterprising Capital: the Dutch private equity and venture capital market in 2012’’
The NVP, together with the Corporate Finance team of PwC Advisory, surveys all private equity and venture capital activity in the Netherlands. Results are processed through a pan-European cooperative called PEREP_Analytics. This platform is supported by the European Private Equity & Venture Capital Association (EVCA), NVP and all other European private equity and venture capital associations.

Data are collected through a survey and reliable public sources and cover about 95% of the industry and market activity.

‘’Enterprising Capital: the Dutch private equity and venture capital market in 2012’’ distinguishes between activity by private equity and venture capital firms based in the Netherlands (industry statistics) and activity in Dutch portfolio companies by foreign or domestic private equity and venture capital firms (market statistics).

Bear in mind that only the value of equity stakes is taken into account. Other publications often include bank or other leveraged financing and therefore arrive at other numbers.