Despite a gloomy VC environment with fewer exits, insufficient liquidity, and tougher fundraising, European #VentureCapital fund managers expect their Portfolio value (NAV) to significantly increase in the next 12 months. The majority of respondents (71%) expect a positive NAV growth in 2023 (1/3 of them leaning towards an increase between +10% to +25%). Only 17% of VC fund managers expect NAV to decline (vs 14% in 2022). According to data from Pitchbook, European VC funds’ NAV declined 6.1% in 2022, with a further decrease of 1.3% in Q1 2023.
Although VC optimism is high for the next 12 months, there was a simultaneous decrease in overall confidence regarding the long-term growth prospects of the European and the overall VC industry.
𝐎𝐭𝐡𝐞𝐫 𝐤𝐞𝐲 𝐡𝐢𝐠𝐡𝐥𝐢𝐠𝐡𝐭𝐬 𝐟𝐫𝐨𝐦 𝐭𝐡𝐞 𝐄𝐈𝐅 𝐕𝐂 𝐒𝐮𝐫𝐯𝐞𝐲:
🔹70% of respondents expressed a grim outlook on the VC fundraising environment.
🔹Capital deployment and new investments pace slowed down, together with more difficulties for VC funds to find co-investors.
🔹These difficulties led to decreases in both competition among investors and entry valuations.
🔹Portfolio companies developed worse than expected, even compared to the Covid19 period.
🔹External financing is harder to reach for portfolio companies, and more insolvencies are expected.
🔹72% of respondents indicated that the exit environment become more complicated in 2023.
🔹The majority of VCs indicated a significant decline in exit prices, more than in the 2022 survey.
Data: 472 responses from VC fund managers (371 unique VC firms) were received between 17 July and 4 September 2023.
Source: EIF Research / #alternativeInvestments #investing #AssetAllocation
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