Brussels, 07/11/2003 (Agence Europe) - Private equity investment in the EU, including both venture capital and buy-out investment, increased slightly in 2002 compared to 2001. It has only ever been higher in 2000. But there was an important shift towards less risky buy-outs, which at €16.8 billion reached their highest ever level, more than double the 1998 volume. Investment of venture capital fell significantly compared to 2001, to €10.1 billion, partly in the wake of the bursting of the Internet "bubble", and was roughly half the level it reached in 2000. Venture capital investment in the US contracted even more severely but was still double that of the EU. Although the situation remains difficult, general economic recovery will allow the European venture capital market to resume growth from a significantly strengthened base. These are the main conclusions of the European Commission's fifth and final progress report on the implementation of the Risk Capital Action Plan (RCAP) which concludes this year. The Report points to important progress since the launching of the RCAP in 1998 in setting up an appropriate regulatory framework, with key measures having been adopted in 2003 as part of the EU's Financial Services Action Plan (FSAP). Internal Market Commissioner Frits Bolkestein said: “The RCAP has got rid of many obstacles to European risk capital markets. By doing that it has helped new and growing companies create jobs. It has become a benchmark for policy makers across the EU and has helped strengthen the European risk capital industry". His colleague, Commissioner for Economic Affairs Pedro Solbes added: “In spite of recent difficulties, the positive effect of the RCAP is already felt. There is some evidence that private equity is gaining acceptance as a separate asset class in many Member States. The gap with the USA in venture backed investments is still there but is decreasing".
(For information: http: //http://www.europa.eu.int/comm/internal_market/en/finances/mobil/risk-capital_en.htm ).