With more developed venture capital industries in North America and Asia, European venture capital is still a growing market. This blog will analyze the activity of Europe-based private wealth investors (defined as wealth managers and family offices) and how they gain exposure to the venture capital industry, given that the major venture capital success stories of recent times relate to markets in other regions worldwide.
Of the 153 Europe-based private wealth investors active in venture capital tracked on Preqin’s Private Equity Online, 81% look to the European market for fund investments. A significantly smaller proportion (33%) target the more developed venture capital industry in North America, while fewer still target Asia-focused venture capital opportunities (27%). North America-based private wealth investors, comparatively, show a greater preference for investing in their domestic market, with 92% focusing on venture capital opportunities in North America and just 34% seeking exposure in Europe.
As shown in the chart above, the largest proportion of each private wealth investor type has a preference for generalist venture capital funds. However, a greater proportion (48%) of wealth managers look to gain exposure to early stage venture capital vehicles compared with family offices (46%); in addition, a larger proportion (42%) of family offices look to invest later in the venture capital cycle, in expansion/late stage funds, compared with wealth managers (35%).
Indosuez Wealth Management is one example of a Europe-based wealth manager seeking venture capital opportunities outside its domestic market by focusing on Asia, Israel and emerging markets. Acorma Management is also looking to invest in venture capital over the next 12 months; the family office takes an opportunistic approach to investing.