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Cash flows to Euro techs
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June 15, 1999: 8:52 a.m. ET
Venture capitalists pour money into European technology, survey says
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LONDON (CNNfn) - European venture capital investors continued to pour funds into the market during 1998, and particularly into the high-tech sector, according to a survey released Tuesday.
The European Private Equity and Venture Capital Association said Tuesday that funds invested in the technology sector surged 75 percent in Europe during 1998, rising to 4 billion euros ($4.18 billion). The high technology sector now accounts for 28 percent of total investment, up from 24 percent, making it the largest single sector, according to the survey.
The amount raised by European venture funds in 1998 rose almost 2 percent to a record 20.3 billion euros compared with 1997, but significantly higher than the 7.96 billion raised in 1996.
Venture funds splashed money into the market at an even faster rate, with the total amount invested soaring 50 percent to 14.5 billion euros. The time lag between funds raising money from investors and being able to put that money into the markets explains the difference between the amount raised and the sum invested in a given year.
Investors were eager to cash in their investments, too. The number of Initial Public Offerings divested by European venture capital funds almost tripled during 1998 to 924 from 391.
"Things in Europe are moving, especially in the high-tech sectors," said Paul Waller, outgoing chairman of EVCA and director of fund management at Europe's largest venture capital investor 3i Group (III).
The study highlights great disparities in the pace of venture capital growth across Europe, however. In the United Kingdom, new funds raised slid by more than a quarter during 1998, although the amount actually invested surged 60 percent to 7.1 billion euros.
The picture was similar in Germany, but the situation was different in France, where new funds more than tripled, to overtake Germany and stand second behind the United Kingdom's 8.96 billion euro figure at 3.81 billion euros. 
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