12 / 05 / 2014 LAATST BEWERKT 12 / 05 / 14 15:43

New Market Report: Netherlands Attractive for Private Equity Investments

NETHERLANDS ATTRACTIVE FOR PRIVATE EQUITY INVESTMENTS:

MID MARKET ENTREPRENEURS NEED TO BETTER FIND THE WAY TO PRIVATE EQUITY


  • PRIVATE EQUITY AND VENTURE CAPITAL INVESTED €2.4 BILLION IN A RECORD NUMBER OF 336 DUTCH COMPANIES
  • INTERNATIONAL PRIVATE EQUITY PLAYERS VERY ACTIVE IN THE NETHERLANDS
  • VENTURE CAPITAL INVESTED €194 MILLION IN HIGHEST NUMBER (190) OF START-UPS SINCE THE CRISIS
  • DESPITE FUNDING GAP FEW TRANSACTIONS IN UPPER SME AND MID MARKET
  • LOW FUND RAISING ACTIVITY
  • GROWTH FORESEEN FOR 2014
DOWNLOAD THE REPORT HERE.

2013: more investments in more companies
The latest NVP study shows that investments in Dutch companies by private equity and venture capital firms rose considerably. From €1.4 billion in 2012 to €2.4 billion in 2013. This was mostly due to big investments by international private equity houses. The number of companies invested in was with 336 a historic high, especially because of a great number of investments in start-ups and early ventures. In 2013 a total of €1.9 billion worth of equity stakes were sold or otherwise divested compared to €1.6 billion in 2012. A total of €768 million of new funds were raised, significantly less than in previous years.

Investments in medium sized enterprises fell below expectations
No growth was seen in investments for medium sized enterprises where typical investments would be between €5 en €50 million equity. Philip Houben, NVP chair: ‘’the good news for Dutch companies is that in 2013 we saw a great deal more investments who were worth in total €1 billion more. This shows that private equity and venture capital investors are confident of the future. The rise in the total value of investments is mostly due to a small number of large deals like Intertrust, Mediq, CSM and Estro (Catalpa) by international private equity firms. In the middle segment, where 90% of our members’ activity takes place, we do not see more transactions and even a lower average investment. This is odd considering the fact many companies are hit by tightened credit lines from banks. One would expect that ambitious Dutch entrepreneurs would seek out alternatives like private equity and venture capital more when they want to expand their business. Dutch private equity and venture capital firms who typically operate in this market have more than enough skill and capital available, so we are not the bottleneck. But perhaps some entrepreneurs have not yet fully adjusted to the idea that the bank is not the only place to look anymore’’.

Also a record number of venture capital investments were made, €194 million in 190 young companies. ‘’That’s the statistic that lightens up my day the most. Also the unique role the Regional Development Funds (RDFs) play is important to acknowledge’’, according to Houben.

Relatively slow fund raising
Fund raising by Dutch private equity and venture capital firms has been relatively slow in 2013. Only €768 million, which is considerably less than previous years. Tjarda Molenaar, director of NVP: ‘’part of the explanation lies in the fact that big Dutch players like Egeria and Waterland did not raise funds in 2013 and instead focused upon maintaining and expanding their portfolio. What worries me is the fact that Dutch pension funds invested little in Dutch private equity funds, even though very good returns can be made here. Especially medium sized pension funds might be deterred from investing in our asset class by an abundance of laws and regulations being poured over them. Family offices and private individuals on the other hand did see the opportunities and invested fully in Dutch private equity funds.’’

Fund raising for venture capital reached an all-time low with just €75 million raised. To counter this the Ministry of Economic Affairs and the European Investment Fund (EIF) initiated the Dutch Venture Initiative (DVI). ‘’The fund raising numbers really show the importance of an initiative like the DVI and the precarious situation venture capital fund raising is in. Are we to move forward with financing innovation and economic growth, this must change’’, according to Molenaar.

Spirits are up for 2014
Philip Houben: “Increasingly reports reach us that many new investments are in the pipeline. Corporate finance advisors tell us that they are very busy, just as our members are. Momentum seems to be there, therefore I dare to say investment value and number will go up in 2014.’’

Download the whole report 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 2013’’ 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 2013’’

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.