Venture capital’s rise

The acquisitions of Tim Hellas, Q-Telecom and Hyatt Regency during 2005 have lifted Greece from the bottom of the European table in venture capital investments after many years. Those three companies cost international venture capital players some 2.5 billion euros, taking Greece to the 12th position in Europe. These investments amounted to 0.22 percent of the country’s gross domestic product, with the European average standing at 0.4 percent of GDP. Nevertheless, the data of the European Venture Capital Association (EVCA) show that more effort is needed for additional capital to come to Greece. In markets such as Denmark or Sweden, venture capital investments exceeded 0.8 percent of GDP in 2005. Greece scored higher thanks to the investments by Apex Partners and TPG in Tim Hellas and in Q-Telecom and by BC Partners in Hyatt. The activity of Greek business holdings firms has been negligible, despite the tools developed for the strengthening of investment in innovative companies. The Greek firms in the sector lag because investment by venture capital in Europe soared last year due to the Management Buy-Outs (MBOs) and not due to investment in new companies. EVCA data suggest that last year 68.2 percent (that is 32 billion euros) of the 47 billion euros invested by business holdings companies concerned MBO agreements. During 2005, venture capital companies in Europe invested in 7,207 enterprises, with 25.2 percent going to the UK market. Interest focused on sectors connected with retail sales, as in previous years, followed by the telecommunications sector. Although they attracted smaller investment in terms of size, the sectors of informatics and of health/medical equipment recorded the highest number of acquisition agreements. An illustration of the mobility of venture capital companies is in the size of the funds they managed to raise from international markets last year; that was a record year in the domain’s history as it drew 72 billion euros, which is almost three times as much as in 2007 (27.5 billion euros), while five new funds were created in 2005 of more than 3 billion euros each. Greek companies drew just 27 million euros.

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