More than seven tenths of European investors in private equity and venture capital believe corporate venturing could fill more of the early stage gap, according to a survey by private equity secondaries firm Coller Capital.
Europe is the major investment area where limited partners (LPs or investors) are most bullish about the potential for corporate venturing. Coller Capital’s Global Private Equity Barometer found 56% of Asia-Pacific LPs expect corporate venturing to fill more of the early stage gap, while in North America only 36% expect an increase in corporate venturing.
The survey was conducted on 101 investors in private equity, with 40% coming from North America, 40% from Europe and 20% from Asia-Pacific.
Stephen Ziff, a partner at Coller, said: “Corporate venture is much more established in the US than Europe. Amongst European LPs, there is an expectation that corporates could play a more prominent role because of the vacuum left by traditional VCs, but they haven’t yet made their presence felt as much as their peers have in the US. The expectation is they could do it. Whether they will do it is a different matter.”
Ziff added: “There clearly has been a resurgence in corporate venturing activity: corporates have capital to deploy and are looking to grow into new areas of business – corporate venturing is an interesting way to go.”
The survey also found European limited partners believe the venture industry needs more government support to flourish, whereas Asian and North American LPs were more sceptical. Ziff said: “The LP [limited partner] view of European venture capital is there needs to be government sponsored initiatives to kick start the industry. Without it, close to three in four LPs [72%] are of the view that the European VC industry has no hope of reviving”
The expectation and desire on the part of European LPS for more corporate venturing investment and government support of European venture, comes as more than one third of the European respondents to the survey admitted to losing money in their venture investments. Only a single digit percentage of Asia Pacific and North American LPs have lost money in venture investment.