EVCA has changed its name to To find out more about the European Private Equity and Venture Capital Association please visit: www.evca.eu Follow us on Twitter @EVCA_EU
or for more information, email [email protected] Contents
Chief Executive’s report Chairman’s overview
4 5
Governance Political advocacy
6 10
Industry promotion Industry excellence
12 18
Data and research Financial report
20 22
May 2015 EVCA Annual Report 2014/2015 As anticipated, 2014 was a period Our case with policymakers and the of significant political change at broader general public is supported Chief the European level. The make-up by the fact that, in a protracted period of the European Parliament altered of low interest rates and investment Executive’s dramatically and a new Commission returns, private equity, venture capital took charge of the EU’s legislative and infrastructure are demonstrating report agenda for the next five years. they can provide a much-needed boost to returns for pension funds It was also a period in which and insurers, who manage assets perceptions of private equity and for millions of savers. And in an venture capital among key policymakers environment of low economic growth, in Brussels shifted decisively for the our industry is driving growth and job better. This change is testament to the creation at companies, in turn helping EVCA’s unstinting efforts in promoting improve prosperity for millions of our industry: policymakers now have workers. a greater understanding of the long- term benefits private equity, venture These are facts that our Perceptions of capital and infrastructure investment Communications team feeds through to can bring. broadcast media and the press to huge private equity beneficial effect – in the past year, the While this shift has been many years EVCA has secured hundreds of pieces in the making, the appointment of and venture of positive coverage in leading media. a new European Commission was capital among a clear catalyst for the change in All these efforts are underpinned by attitude. The result is that private our vital work gathering data and key policymakers equity and venture capital now occupy information. We are co-ordinating with a prominent place in the framework national associations across Europe to in Brussels have for a European Capital Markets Union. develop a new pan-European database This role recognises the EVCA’s strong that will be the definitive resource for shifted decisively message that our industry is a valuable private equity and venture capital data. mechanism for connecting global We are also striving to improve for the better. investors with businesses and capital professional standards, spreading projects in urgent need of funding. This change best practice through training The EVCA has had many other courses and demanding that all our is testament successes in the last year. These members adhere to the highest levels include better treatment of private of accountability, governance and to the EVCA’s equity and venture capital in Solvency II transparency. rules, exemption from bank structural I thank Anne for her contribution reform proposals, and no punitive unstinting efforts this year and look forward to working treatment for private equity assets alongside Max Römer over the coming under current plans for pension reform. in promoting our 12 months. I would also like to thank the But our work is far from complete. EVCA staff for their dedication during industry We are finding and documenting this year of significant change, and examples of unfair or inconsistent salute our members who contribute to implementation of the Alternative the EVCA and its many projects. Investment Fund Managers Directive The EVCA is a dynamic and essential at a national level, and are pressing association, and our doors are always our case for a level playing field across open to new members who share our Europe with the Commission. We drive to make European private equity will also continue to work to ensure and venture capital better understood. conditions support private investment and do not discourage pension funds and other international institutions DÖRTE HÖPPNER from supplying the capital needed to CHIEF EXECUTIVE transform European companies.
[4] EVCA Annual Report 2014/2015 May 2015 Following some promising signs of Under this scheme, the EU budget growth, many European economies would provide cornerstone investment slowed again in 2014. Concerns and act as a catalyst for private Chairman’s about the resilience of the Eurozone sector investment. Following resurfaced, as Greece, quantitative extensive analysis of the benefits and overview easing and member states’ divergent economic impact of our proposal, we approaches to austerity were widely have presented our findings to the debated. Yet despite these clouds, Commission, which is considering this investment is still flowing to Europe and several other innovative projects and confidence is at its highest since for the investment fund. the financial crisis. With the number of European venture Against this backdrop, the EVCA has capital success stories growing, the continued to promote the benefits industry is demonstrating its ability of private capital to policymakers, to nurture emerging entrepreneurs, investors and business leaders. Ours is incubate new ideas and create jobs. a valuable voice in Europe, representing The EVCA is committing significant the entire industry from venture capital resources to ensuring that institutions and SME investment firms, through to with capital can invest without large buyout groups and infrastructure restriction in long-term assets. We are With the number funds. The Secretariat’s efforts are also supporting corporate venturing by essential in promoting understanding large companies with the finances and of European of this broad and varied asset class, desire to create, develop and acquire venture capital and ensuring that all fund managers innovative technologies. and investors are treated fairly by The last year has also seen work to success stories regulation. create an EVCA benchmark to measure Our message to policymakers has the performance of venture capital- growing, the remained focused on how our brand of backed companies that list on stock long-term patient capital comes with exchanges. The index aims to quantify industry is the expertise to build better businesses, the value created by companies while leading to job creation and economic in venture capital hands and after demonstrating growth. floating. its ability to It’s a message that is being heard: in This initiative fits squarely with efforts November last year, new European to show how our industry forms an nurture emerging Commission president Jean-Claude integral and essential part of the real Juncker proposed the creation economy and the investment world. Not entrepreneurs, of a European Fund for Strategic only does it create jobs and prosperity, Investments (EFSI) to inject at least it also feeds investment markets with incubate new 315bn into business and infrastructure dynamic businesses that can become € across the EU. The scheme envisages world-leading corporations. ideas and create 21bn of EU funding, which the € It has been my privilege to chair the Commission hopes will be multiplied EVCA over the last year and I wish Max jobs. many times by private capital. Römer of Quadriga Capital well when I have been particularly pleased to he takes over the reins in June as a representative of the association’s mid- participate in the EVCA’s efforts to market private equity community. promote venture capital in Europe. In light of the EFSI proposal, the EVCA has I would like to thank Dörte Höppner and put forward a recommendation for a other members of the EVCA Secretariat programme of investment into several for their unwavering support. Similarly, private sector-managed fund of funds, I thank George Anson, Marleen Groen, which would attract back private sector Joanna James and Joey Mason for investment to the venture industry and their contribution to the board. They allocate a significant proportion of their have all given great service to the ANNE GLOVER commitments to venture capital. EVCA’s members. CHAIRMAN
May 2015 EVCA Annual Report 2014/2015 [5] Governance
The EVCA would like to acknowledge the commitment and thank the members of the EVCA Board of Directors, Platform Councils and Committees 2014/2015 for their contribution to the industry.
ANNE GLOVER MAX RÖMER MARLEEN GROEN CRAIG DONALDSON BOARD OF DIRECTORS BOARD OF DIRECTORS LIMITED PARTNERS PLATFORM MID-MARKET PLATFORM CHAIRMAN CHAIRMAN-ELECT EVCA VICE-CHAIRMAN EVCA VICE-CHAIRMAN
JOEY MASON JOANNA JAMES PATRICIA VOLHARD WILLIAM WATSON VENTURE CAPITAL PLATFORM LARGE BUYOUT TAX, LEGAL AND REGULATORY PROFESSIONAL STANDARDS EVCA VICE-CHAIRMAN EVCA VICE-CHAIRMAN COMMITTEE COMMITTEE CHAIRMAN CHAIRMAN
[6] EVCA Annual Report 2014/2015 May 2015 The EVCA is committed to fully and Lindauer Allianz Capital Partners TAX, LEGAL & REGULATORY fairly representing the interests of David Lindstrom MetLife Investments COMMITTEE each segment of its membership. To Christina Pamberg Alcyon Holding Chairman 2015 Patricia Volhard P+P achieve this, members are organised Klaus-Björn Rühne ATP Private Equity Pöllath + Partners | Chairman 2014 into four “Platforms”, which are Partners | Helen Steers Pantheon Simon Witney King & Wood Mallesons a reflection of the actual market Claus Stenbaek Keyhaven Capital SJ Berwin | Vice-Chairman Phil segments: Limited Partners, Venture Partners Bartram Travers Smith | Platform Capital, Mid-market Private Equity and Representatives Gitte Bedford Large Buyout. MID-MARKET PLATFORM Robert Bosch Venture Capital Hugo The Platforms are each led by COUNCIL Lauque Ardian | Rachel Thompson a Council composed of industry Vice-Chairman Craig Donaldson Bridgepoint | Jay Modrall Norton Rose practitioners, elected by the HgCapital | Members John Barber Fulbright | Regional Representatives membership. Bridgepoint Advisers Ltd. | Trond Ana Sofia Batista Abreu Advogados These Councils work with the EVCA Bjørnøy Norvestor Equity | Karsten Fabio Brunelli Di Tanno e Associati Secretariat, to develop tailored Langer Riverside Europe | José Maria Piotr Dulewicz Dentons | Gilles services for the four Platforms, which Muñoz MCH Private Equity Investments Dusemon Arendt & Medernach | Felix are then delivered by the Secretariat. Anne Holm Rannaleet IK Investment Haldner Partners Group | Jakob The work of the EVCA is supported by Partners | Max Römer Quadriga Mosegaard Larsen Nielsen Nørager two main committees, the Professional Capital | Claudio Sposito Clessidra Marco de Lignie Loyens & Loeff Standards Committee and the EVCA SGR | Thibault Surer Astorg Partners David Nicolson Bridgepoint | Martin Tax, Legal and Regulatory Committee, William Watson Value4Capital Nilsson Mannheimer Swartling | Robin which are supported by various sub- Ralph Wyss Gilde Buy Out Partners Painter Proskauer | Bernard Peeters committees and working groups. Altius/Tiberghien | Stéphane VENTURE CAPITAL Puel Gide Loyrette Nouel | Isabel BOARD OF DIRECTORS PLATFORM COUNCIL Rodríguez King & Wood Mallesons Chairman 2014-2015 Anne Glover Vice-Chairman Joey Mason Delta SJ Berwin | Christian Schatz King Amadeus Capital Partners | Past- Partners | Members Alex Brabers & Wood Mallesons SJ Berwin | Jyrki Chairman 2013-2014 George Anson Gimv | Hendrik Brandis Earlybird Tähtinen Attorneys at Law Borenius HarbourVest Partners | EVCA Uli Fricke Triangle Venture Capital Ltd | Sylvie Vansteenkiste King & Chairman-Elect Max Römer Quadriga Management | Anne Glover Amadeus Wood Mallesons SJ Berwin | France Capital | EVCA Treasurer Joey Mason Capital Partners | Christoph Vassaux AFIC | Members of the Tax, Delta Partners | EVCA Vice-Chairmen Jung Holzbrinck Ventures | Sven Legal and Regulatory Committee Craig Donaldson HgCapital | Marleen Lingjaerde Endeavour Vision | Denis Working Groups Groen StepStone Group | Joanna Lucquin Sofinnova Partners | Alain PROFESSIONAL James Advent International Parthoens Vesalius BioCapital | Daniel Members John Barber Bridgepoint Sanchez Nauta Capital VC Partners STANDARDS COMMITTEE Advisers | Alex Brabers Gimv Jan Westerhues Robert Bosch Chairman William Watson Michael Lindauer Allianz Capital Venture Capital | Alberto Trombetta Value4Capital | Vice-Chairman Marta Partners | Rory Macmillan The Carlyle Finlombarda Gestioni | Peter Van Jankovic APG Asset Management Group | Vanessa Maydon Cinven Gelderen ICOS Capital Management Members Margaret Chamberlain Daniel Sanchez Nauta Capital VC Travers Smith | Christian Diller Partners | Helen Steers Pantheon EUROPEAN PRIVATE Montana Capital Partners | George EQUITY ROUNDTABLE Georgiou Capital Dynamics | Neil LIMITED PARTNERS Harding 3i Group | Dan Kjerulf Danske PLATFORM COUNCIL PLATFORM COUNCIL (LARGE BUYOUT) Private Equity Therése Lennehag EQT Vice-Chairman Marleen Groen Partners | David Lindstrom MetLife StepStone Group | Members George Vice-Chairman Joanna James Investments | Jonathan M. Martin Anson HarbourVest Partners | Tom Advent International | Members KPMG | Alain Parthoens Vesalius Eriksson Aeris Capital | Anne Ludo Bammens Kohlberg Kravis Biocapital Partners | Simon Powell Fossemalle EBRD | Neil Harper Robert & Co. | Christopher Crozier Advent International | Andreas Morgan Stanley Alternative Investment Permira Advisers | Francesco Loredan Schober Hannover Finanz | Sue Christian Hinze BlackRock Schweiz BC Partners | Rory Macmillan The Woodman Equistone Partners Europe Asset Management | Dan Kjerulf Carlyle Group | Vanessa Maydon Members of the Professional Danske Private Equity | Michael Cinven Standards Committee Working Groups
May 2015 EVCA Annual Report 2014/2015 [7] Governance continued
EVCA Members
European PE Limited Venture Mid-Market Roundtable/ Partners Capital Large Buyout
Board of Directors
Vice-Chairman Vice-Chairman Vice-Chairman Vice-Chairman + two board + two board + three board + two board members members members members 6 members 12 members 12 members 12 members
Executive Committee Chairman | Past Chairman | Chairman-Elect and four Vice-Chairmen
EVCA GOVERNANCE STRUCTURE
[8] EVCA Annual Report 2014/2015 May 2015 PLATFORM GROUPS MID-MARKET PLATFORM GROUPS Each platform is supported by The Secretariat sub-groups which deal with specific Central and Eastern European industry sectors. Taskforce finds the support of This taskforce undertakes initiatives a large number of VENTURE CAPITAL specifically aimed at the development active and engaged PLATFORM GROUPS and promotion of private equity and venture capital in the region of Central members invaluable Digital Agenda Taskforce and Eastern Europe (CEE). Among This group promotes the digital media in conducting its work. its accomplishments, special papers Regular member sector in Europe by highlighting dedicated to annual statistics for compelling cases of successful 2005 to date. interaction ensures investments and exits. It also strives that the team can to create networking opportunities for Chairman Robert Manz Enterprise venture capitalists active in this sector. Investors respond directly to Chairman Nenad Marovac DN Capital members’ needs ROUNDTABLES and remain fully MedTech Taskforce EVCA Roundtables are cross-Platform up to speed with The group is working on a paper initiatives which are open to members exploring the clinical and regulatory from all segments. developments in a situation in European MedTech and rapidly changing the many advantages the sector Single Family Office Roundtable has to offer investors. The MedTech The SFO Roundtable represents industry. Taskforce is also creating new the interests of the SFO community networking opportunities for venture within the EVCA. It works to increase capitalists active in this sector. SFO EVCA membership and provides tailored training courses. Chairman Joey Mason Delta Partners Chairman 2014 Tom Eriksson Aeris Environmental Taskforce Capital Chairman 2015 Christina This taskforce acts as an information Pamberg Alcyon Holding exchange platform on the EVCA’s Chairman Christian Strain Summit Public Affairs activities and sector- Corporate Venture Capital Partners related topics among members Roundtable The Corporate Venture Roundtable active in this sector. It has previously Infrastructure Roundtable gives a voice to the increasingly written a white paper calling for The EVCA’s infrastructure members influential corporate venture capital increased support for the European are investors in the facilities, services community. Its membership includes Cleantech sector. In addition, the and installations that are needed leading companies who are active taskforce collects cases of successful for the operation of society. They in Europe and it has strong ties with investments and exits to reinforce the primarily take control positions and similar networks in other countries EVCA’s global case study databank. seek to improve companies through such as the US National Venture value creation. Chairman Patrick Sheehan Capital Association’s Corporate Environmental Technologies Fund Venture Group. The Infrastructure Roundtable provides a forum for members to Life Sciences Taskforce Chairman Jan Westerhues Robert address the policy issues affecting This new group focuses on making a Bosch Venture Capital their operations and to collect data case for the European Life Sciences Growth Capital Roundtable on their investment activity to inform industry. Focusing on the economic The Growth Capital Roundtable future communications. impact of venture capital-backed provides a platform for those EVCA sector companies, the taskforce also Chairman Livio Fenati Arcus members that are growth capital helps create networking opportunities Infrastructure investors. The Roundtable facilitates for venture capitalists active in this the discussion and sharing of best Responsible Investment Roundtable sector practices among its members and For information about the Responsible Chairman Denis Lucquin Sofinnova seeks to promote growth capital as an Investment Roundtable, please refer Partners asset class to institutional investors. to Industry Excellence.
May 2015 EVCA Annual Report 2014/2015 [9] Political advocacy
The Commission seeks a more integrated and resilient European capital market, in which equity investors play a larger role alongside traditional lenders. Private equity and venture capital, as well as infrastructure funds, are seen very clearly as part of the solution.
MICHAEL COLLINS DEPUTY CHIEF EXECUTIVE AND PUBLIC AFFAIRS DIRECTOR Michael has 19 years experience gained in senior EU policy making roles including Managing Director of EU Government Affairs at a global bank and Head of Economic and Financial Affairs at the UK Representation in Brussels.
[10] EVCA Annual Report 2014/2015 May 2015 Last year saw significant change in the This recognition illustrates how the European Union. Elections in May set EVCA’s key messages have resonated The EVCA’s key the scene for sweeping changes at the strongly with policymakers focused on messages have European Parliament, while November delivering growth. We have made the resonated strongly saw the arrival of a new Commission, case that private equity and venture led by President Jean-Claude Juncker, capital has a key role in providing with policymakers on a drive to reinvigorate flagging funding for small and medium-sized focused on delivering economic performance across the EU. enterprises, and that these companies growth can become the big employers of the Since the Parliament elections, the future. EVCA’s public affairs team has been meeting with both new and re- We have explained that European elected members and their advisors, pension funds are cornerstone backers reiterating the positive contribution of private equity and venture capital that private equity makes. We have funds as they can offer a meaningful also been developing relationships boost to retirees. We have told how with new Commissioners and with the the industry attracts capital from We will continue to monitor regulation officials that work with them. foreign investors and institutions for measures that could cause and channels this into European These efforts are part of the EVCA’s issues for our industry but we are businesses. Moreover, we have gained long-running drive to engage with encouraged by progress to date. recognition that private equity is a policymakers and to create an open long-term investment that supports and constructive dialogue with companies over time. FUTURE CHALLENGES European institutions. We will continue While private equity is more widely to reinforce the message that private The EVCA will continue to work closely understood in policy circles across equity and venture capital is a positive with European institutions as Capital Europe, there remain areas of concern force in the European economy. Markets Union plans are developed, to to our members. ensure that investors are encouraged While a significant volume of to commit capital and that private We need to ensure that global fund legislation remains on the table, equity and venture capital firms can managers are able to market their there has been a marked shift in invest freely in Europe. investment funds effectively across emphasis from the new Commission. Europe and that European investors There is less focus on curtailing risks REGULATORY SUCCESSES can access best-in-class funds and potential excess in financial wherever they may be domiciled. So As well as securing recognition within markets, and a greater priority on we will be working hard to ensure the the Capital Markets Union theme, measures to tackle persistently high implementation of a workable third EVCA public affairs yielded other unemployment and low growth. country passport across the EU by positive results in 2014. Policymakers are looking for measures 2018 and that access is fair in the to stimulate investment in business Notable among these is the reduction meantime. and infrastructure and create jobs. in the risk-weighting for private equity More broadly, the focus of regulation and venture capital within Solvency has moved on to cracking down on CAPITAL MARKETS UNION II guidelines from 49% to 39%. This tax avoidance and evasion at both The Green Paper consultation makes the asset class more accessible a personal and corporate level. The document on Capital Markets Union, to insurers who are keen to add strong EVCA is engaging with the OECD, as released in February, may still be light returns and diversification to their it discusses new global standards on detail, but its release just a few portfolios. for interest deductibility and access months after the new Commission The proposed exemption of private to double tax treaties, to ensure the took office shows the scale of their equity and venture capital from operations of private equity funds are intent and ambition. Commission proposals on bank fully understood and treated fairly The Commission seeks a more structural reform is another good within any new rules. integrated and resilient European result. Finally, we are pleased that You can find more information on capital market, in which equity the so-called IORPD proposal to EVCA Public Affairs on our website. investors play a larger role alongside regulate pension funds includes no traditional lenders. Private equity and specific capital requirements for their To get in contact with the Public infrastructure funds are seen very investments in private equity and Affairs team, email publicaffairs@ clearly as part of the solution. venture capital. evca.eu
May 2015 EVCA Annual Report 2014/2015 [11] Industry promotion
Last year, we built on extensive preparations for the European elections in May 2014 by connecting with the policymakers, reporters and commentators who follow our industry and are focused on Europe’s growth agenda.
EMMA THORPE COMMUNICATIONS & EVENTS DIRECTOR Emma has 18 years experience in financial services and corporate communications. Past experiences include European Communications Director at a global private equity firm.
[12] EVCA Annual Report 2014/2015 May 2015 The EVCA’s communications team to our membership and important to works closely with colleagues in policymakers. The website now acts The team is public affairs, events and research to as a forum for discussing regulatory promote the private equity, venture and financial topics, such as the embracing new capital and infrastructure industry Capital Markets Union, positioning technologies to with press, policymakers, investors the EVCA at the heart of the debate and the business community. about Europe’s financial and economic reach new audiences. development. Our communications work has Last year, for encompassed all sectors of our The EVCA has also introduced short example, we created industry. The aim has been to videos from key figures in private position private equity as a valuable equity and business to provide a an animation to contributor to the European economy simple way for the public to access through growth and job creation, and information about the industry. promote the benefits to attract investors to the asset class. Alongside these efforts, the EVCA has of venture capital to been expanding the use of Twitter Last year, we built on extensive and LinkedIn to communicate with entrepreneurs. preparations for the European members and stakeholders. We now elections in May 2014 by connecting have 2,250 followers on Twitter, with key policymakers, reporters including high-ranking EU officials and commentators who follow our and MEPs, while the number of EVCA industry and are focused on Europe’s followers on LinkedIn has almost growth agenda. We have produced a tripled to over 3,100. wide range of resources and employ resulted in 400 positive pieces of social and digital media, as well as The team is embracing new coverage about the private equity and continuing with more traditional press technologies to reach new audiences. venture capital industry, as well as the relations. Last year, for example, we created an EVCA. animation to promote the benefits of We have also produced a steady venture capital to entrepreneurs. The DIGITAL AND SOCIAL MEDIA stream of publications aimed at animation is available on the EVCA policymakers, the EVCA membership, After redesigning and updating the website, as well as on YouTube, where press and the general public. In EVCA website at the start of 2014, it has been viewed over 14,000 times addition to the Essential Work report, we populated it with nearly 200 since it was uploaded in December. we have released the AIFMD Marketing case studies drawn from members This builds on the success of our first that cover every region of the EU. animation explaining the workings Guide, which takes a closer look at These provide concrete evidence of of private equity, which continues to marketing under national placement private equity and venture capital’s attract viewers from across the world. rules across Europe. contribution to businesses and job We additionally have published creation both across Europe and PRESS ENGAGEMENT two important publications to within individual EU constituencies. Over the past year, the support the industry’s relations We continued to develop the website Communications team has spent a with its investors. In 2014, we to create an essential resource and significant amount of time engaging commissioned independent research point of information on private equity, with influential journalists and from Greenwich Associates, which venture capital and infrastructure. We opinion formers at a broad range of assessed perceptions of private equity have received very positive feedback mainstream publications, financial among Europe’s pension funds. The from MEPs and EU officials for both journals and broadcast media to study provided valuable information the guide and the case studies, which promote a better understanding of on investors’ key motivators for in turn helped with our relationship the benefits our industry brings to investing in private equity, and how building efforts. Real-life examples companies, workers, savers and the fund managers can access investors of private equity in action have wider economy. who have currently yet to allocate helped bring the industry to life for Among the publications, we maintain capital to the asset class. In addition, policymakers. an ongoing dialogue with the Financial we published our regular analysis Over the year, we have continued Times, The Wall Street Journal and of investment activity in Central to build out our digital content. We The New York Times. We also engage and Eastern Europe and a pan- have posted regular commentaries on regularly with broadcasters including European private equity performance industry issues that are both relevant CNN and CNBC. Those relations have benchmarks study.
May 2015 EVCA Annual Report 2014/2015 [13] Industry promotion
EVCA events create a platform for constructive debate and essential networking among our members, policymakers and other participants in the industry.
EuropEan privaTE EquiTy & vEnTurE capiTal associaTion
EVCA Handbook Professional Standards for the Private Equity and Venture Capital Industry Edition January 2014
Act in fairness Do no harm to The must attend the Industry event in Europe sørEn thInGGAArd hAnsEn / hEAd oF prIVAtE EquIty / IndustrIEns pEnsIon
Act with integrity
Maintain confidentiality Keep your promises
Disclose conflicts of interest 2014– 2019 Private equity’s contribution to Octo Telematics building European Building a market leader in telematics for the car insurance market 015
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[14] EVCA Annual Report 2014/2015 May 2015 EVENTS manager selection, secondaries, terms As the world’s largest private equity & conditions and direct investment. The Investors’ Forum and venture capital association, the The Investors’ Seminar Asia 2014 EVCA runs an extensive programme in December took a delegation of is by far the best of events globally. These are designed European industry participants and event in Europe to create a platform for constructive members to Beijing and Seoul. They debate about private equity and met limited partners in the region to meet investors venture capital among our members, who are already investing in European and fellow GPs and policymakers and other participants private equity and venture capital, or in the industry. They also provide have a strong appetite to do so. discuss the state of an environment for networking and The conference had a strong the industry the informal exchange of ideas and educational agenda and sought to information among attendees. inform investors about the state of the Max Bautin IQ Capital The Investors’ Forum in March is European market, current regulation a well-established event in the and investment opportunities. The private equity calendar. It is the only programme was well received by conference of its kind to offer a 1:1 attendees and we will be returning to ratio of private equity managers and Asia again this year to build further on investors. initial successes. The 2015 Forum welcomed keynote In addition to our investor-focused speakers Niklas Zennström, co- events, we ran the Venture Capital founder of Skype and now CEO and Forum in Berlin, which provided lively founding partner of Atomico, and Dr networking sessions and inspiring Linbo He, senior managing director commentary on building successful and head of private equity at China companies and a sustainable venture Investment Corporation. capital infrastructure in Europe. The regular EVCA Chairman’s Dinners are a chance for members to meet The event featured industry data The EVCA is currently preparing for other influential industry leaders, analysis from EVCA past Chairman the CFO Forum 2015, which will be discuss industry trends and hear the and HarbourVest Managing Director held in Brussels in June. The event latest from our Chairman and Chief George Anson and T. Bondurant has been extended to reflect the Executive. Meanwhile our VC After- French from Adams Street Partners, growing importance of the CFO and Work gatherings offer members of demonstrating the strength of the COO roles within private equity. We the local venture capital ecosystem private equity industry and the are especially pleased to welcome EU the opportunity to meet, network and value-add to the European economy. Commissioner Lord Jonathan Hill as a discuss challenges and opportunities Incumbent Chairman Anne Glover keynote speaker for the event. in their region. presented the EVCA’s own data on The Symposium held in Vienna in June venture capital funding, including 2014 encouraged practitioners to look Our events also seek to encourage information on institutional investor beyond day-to-day operations and interest among newer members of investment by fund size and focus. exchange ideas to shape the future the private equity and venture capital Helen Steers shared Pantheon’s direction the industry. It will be the industry. This spring, we are excited research on Europe as an investment last of this event as the association to be collaborating with the BVCA for destination and the importance of will turn its resources to producing a the Young People in Private Equity investors’ including the region in their policy-focused event in Brussels. Networking Evening. This will help portfolio mix. young investment professionals meet their peers and find out more about The forum also introduced a CHAIRMAN’S DINNERS, INFORMAL EVENTS the EVCA’s work and what it has to collaborative session allowing offer. investors to gather peer advice on In addition to a full programme of the leading issues facing investors. conferences and large-scale events, For more information about EVCA Facilitated by Andrew Joy, Senior the EVCA arranges smaller and more events and training, contact Advisor, FF&P and Marleen Groen, informal events for its members. These [email protected] Senior Advisor, StepStone, over 125 are valuable networking opportunities To get in touch with the investors participated in small working and bring members together to meet Communications team, email groups on AIFMD, co-investment, fund new contacts and share ideas. [email protected]
May 2015 EVCA Annual Report 2014/2015 [15]
Industry excellence
Work on new, updated investor reporting guidelines highlights the EVCA’s relentless drive for ever-better professional standards
EVCA Handbook Professional Standards for the Private Equity and Venture Capital Industry Edition January 2014
Act in fairness Do no harm to the Industry
Act with integrity
Maintain confidentiality Keep your promises
Disclose conflicts of interest
THE PROFESSIONAL STANDARDS HANDBOOK The handbook provides accessible, pratical and clear guidance on the principles of governance, transparency and accountability that all EVCA members must adhere to.
[18] EVCA Annual Report 2014/2015 May 2015 The development, promotion and focus purely on valuation standards. course that explain best ESG practice guarding of the industry’s professional The EVCA is drawing mainly on and demonstrate how it can be standards is a central role of the three sources of information to implemented at a fund, manager and EVCA. We produce, update and create best-in-class guidance for investee company level. distribute a Handbook that informs membership. Our new guidelines will The Roundtable has also published a and educates members on best incorporate the strongest elements Responsible Investment Bibliography. practice in fields such as reporting to of the EVCA’s legacy reporting This includes a range of links to useful investors and responsible investment, guidelines, as well as the former IPEV information, documents, papers and taking into account existing legislation investor reporting guidelines and the guides on Responsible Investment and and other emerging regulations international standards laid down ESG in the field of private equity. or obligations of relevance to the in the Institutional Limited Partner Chairman Marta Jankovic APG Asset industry. Association’s principles. Management | Vice-Chairman Sue We have also been working closely HANDBOOK Woodman Equistone Partners Europe with national private equity and Limited | Members Graeme Ardus Over the course of 2014, the EVCA venture capital associations to ensure Triton Partners | Adam Black Doughty conducted an extensive review of its that the guidelines fit with national Hanson & Co | David Byrne Adveq Handbook of Professional Standards. standards and best practice in Management | Phil Case PwC | Isabel First introduced in 2012, the Handbook individual member states. By doing so, Combarel Swen Capital Partners aims to provide an accessible we aim to draft a set of standards that Tim Creed Adveq Management reference guide for all aspects of can be adopted across all Europe. Deirdre Davies DB Private Equity professional standards and sets out Jesse de Klerk Robeco Alternative the key principles of accountability, PROFESSIONAL & Sustainable Investments | Silva governance and transparency for our STANDARDS COMMITTEE Dezelan Rabobank Nederland | Blaise industry. It includes the EVCA Code The EVCA promotes the highest Duault PAI Partners | Adam Frost of Conduct, to which all our members ethical and professional standards Partners Group | Erwann Le Ligne must adhere, as well as practical and within the private equity and venture Eurazeo | Amyn Hassanally Coller clear guidance on how to implement capital industry. The EVCA thanks Capital | James Holley KPMG | Paulus the Code. KPMG’s Vincent Neate for his time, Ingram APG Asset Management The 2015 edition of the Handbook effort and enthusiasm, for over ten Pia Irell Altor Equity Partners will include the latest guidelines on years as a member then as chairman Dan Kjerulf Danske Private Equity areas such as fundraising, investment, of the Professional Standards Charlotte Laveson Girard IK divestment, investor reporting and Committee, and welcomes Bill Watson Investment Environmental, Social and Governance from Value4Capital and Marta (ESG) issues. When published, it Jankovic of APG Asset Management EVCA ACADEMY – TRAINING will reflect most up-to-date market as new chairman and vice-chairman, COURSES respectively, of the Committee. practice and behaviour, as well as To support professional development the latest changes in regulation at We thank our other Committee in the industry, we offer high-quality, a European level, most notably the members who have stepped down recognised training courses to help Alternative Investment Fund Managers during the year for the time they private equity and venture capital Directive, which came into effect in have given to the Committee and practitioners throughout their 2013 and has since been transposed the EVCA at large, and welcome new careers. The classes are taught by into law across the European Union. participants. leading industry participants, experts and academics, and combine active INVESTOR REPORTING RESPONSIBLE INVESTMENT learning with up-to-date case studies. ROUNDTABLE GUIDELINES To ensure that the content is current In parallel with the Handbook project, The EVCA Responsible Investment and fits with our membership’s needs, the EVCA (in particular the Working Roundtable encourages the debate we surveyed attendees over the Group on Accounting Standards, of responsible investment practices past year. We received very positive Valuation and Reporting) has been and ESG issues in European private feedback on the courses provided and working on a new set of investor equity. It also plays an important role are currently preparing new courses reporting guidelines. This follows in giving expert advice to the various for 2016. These reflect requests for the decision by the IPEV Board – the EVCA committees and staff. additional course provision to cover International Private Equity and The Roundtable has run practical emerging areas of professional Venture Capital Valuation body – to workshops and a dedicated training expertise needed in the industry.
May 2015 EVCA Annual Report 2014/2015 [19] Data & research
Robust and detailed statistics illustrate private equity’s contribution to the economy through investment in companies. They complement the EVCA’s public affairs and communications efforts, as well as our members’ own activities.
CORNELIUS MUELLER RESEARCH DIRECTOR Cornelius has a PhD in venture capital financing and performance of spin-outs and has extensive academic and operational experience managing international research teams and projects for data collection and analysis.
[20] EVCA Annual Report 2014/2015 May 2015 The EVCA is the authoritative source • Performance data, including fund- of European private equity and level benchmarks for vintage year, The EVCA has made venture capital data. The research quartile, fund investment sector, team collects comprehensive industry region or net return basis significant progress data on a quarterly and annual Economic impact data relating to on the creation of a basis, which it provides to industry • employment and performance at pan-European database practitioners, investors, press, portfolio companies academics, and European and global policymakers. The new database is a major undertaking; we anticipate it will be These robust and detailed statistics finalised during 2015. illustrate private equity’s contribution Statistics 2013, based on PEREP_ to the economy through investment An undertaking of this scale would be Analytics data and in collaboration in companies. They complement impossible without the full involvement with the Central and Eastern Europe the EVCA’s public affairs and of partner national private equity and Task Force, which analysed annual communications efforts, as well as our venture capital associations. We are activity across the region. The report members’ own activities. also very grateful for the support of provides a valuable insight into the law firm Jones Day which is providing developing industry in Central and PAN-EUROPEAN DATABASE pro bono advice on the project: this Eastern Europe, and underscores the has made it possible to conclude an EVCA’s commitment to robust data for The EVCA has made significant agreement that protects the interests the whole of Europe. progress on the creation of a pan- of all co-operating associations and European database that will gather ensures consistency with European THOUGHT LEADERSHIP industry data from across Europe. database law. It will significantly improve existing The research team’s work supports solutions and will raise further the ACTIVITY REPORT our outreach to policymakers; our standard of our data. It will enhance analysis helped frame the EVCA’s our discussions with policymakers, The EVCA 2014 European Private venture capital fund of funds proposal Equity Activity report is an exhaustive press, entrepreneurs and investors, to the European Commission, for report into industry fundraising, and help us explain more precisely the example. In addition, the latest investment and divestment over industry’s contribution to businesses findings on structural changes in the course of the year. The 2014 and the economy. It will also improve European venture capital, such as transparency within the industry. report is based on data collected from some 1,900 private equity and institutional investor composition by In 2014, the EVCA started investing venture capital firms across the EU’s fund size and focus, were presented alongside national private 28 member states as well as non- by EVCA chairman Anne Glover at the equity associations in the new IT member states, including Norway and Investors’ Forum in March. infrastructure that will support the Switzerland. The research team contributed database. We are currently creating a These data gathering efforts are made once again to the OECD’s European secure platform that will be endorsed possible with the help of national Entrepreneurship at a Glance by all European private equity and industry associations. The resulting publication and advised the World venture capital associations and report was published in the EVCA Economic Forum on entrepreneurship- allow fund managers to enter figures Yearbook and on the EVCA website. related financing needs. Research directly into the database. It also forms the basis of the custom Director Cornelius Mueller also This will improve efficiency of data- data reports that we produce for wrote a chapter on developments gathering and ensure members of EVCA members. in European industry statistics for a several associations need only be In addition to our annual activity publication edited by Anna Gervasoni, surveyed once. We will also create report, the EVCA’s research team general manager of Italian association a single high-quality data set that is produces quarterly updates and AIFI, entitled Private Equity and consistent and comparable across responds to around 50 requests each Venture Capital, which provides an all European countries. It will be month for data from academics, think overview on the current state of the comprehensive in its scope and tanks, journalists and consultants industry for practitioners, researchers incorporate: across Europe. and policymakers. • Activity data on fundraising, In 2014, the EVCA also helped create To get in contact with the Research investments and divestments the Central and Eastern European team, email [email protected]
May 2015 EVCA Annual Report 2014/2015 [21] Financial report
PROFIT AND LOSS The EVCA funded two special projects BUDGET 2015 Operating expenses were 6,938,051 with positive long-term impact on For 2015, the EVCA proposes a € in 2014, 1% more than 2013’s total EVCA’s service level: the building of balanced budget before exceptional of 6,887,252. Operating revenues the European Database and a project projects. € decreased by 1% to reach 7,164,756 to review the EVCA’s brand. The total € operating expenses of 303,068 were The EVCA has decided to continue in 2014, compared to 7,217,636 in € € the funding of the one-off projects 2013. aligned to Budget 2014. initiated in 2014. The 2014 net operating profit before The 2014 net accounting loss was 164,449. Budgets have also been allocated exceptional results was 226,705 € € to the activities of the four EVCA mainly because some projects were Platforms, as well as to the pushed back and transferred to BALANCE SHEET Professional Standard Committee Budget 2015. The balance sheet total was and the Tax, Legal and Regulatory 4,480,016 as at December 31, 2014. The provision for events risk has € Committee within EVCA. There are The cash position was 3,944,675 as been reversed given the change in € also various task forces and working at December 31, 2014 compared to accounting policies in 2014, resulting groups managed by the Secretariat. 4,167,251 in 2013. Reserves decreased in an exceptional non-cash credit € from 3,499,047 to 3,334,597 due to As in previous years, the board will entry of 241,889. € € € the net accounting loss. closely monitor the financial situation All projects initiated in 2013 were throughout the year. The provision for event risk has been completed in 2014 for a total cost of reversed according to the change in 329,975 as budgeted. € accounting policies.
Financial statements HISTORIC EVOLUTION (in millions of euros)
Revenue Expenses Reserves
2006 7. 21 2006 7. 20 2006 2.12
2007 9.34 2007 9.33 2007 2.14
2008 9.47 2008 9.47 2008 2.15
2009 7.72 2009 8.04 2009 1.82
2010 8.46 2010 7. 52 2010 2.77 Actual Actual Actual 2011 8.79 2011 8.59 2011 2.97
2012 7.94 2012 7.75 2012 3.16
2013 7. 22 2013 6.89 2013 3.49
2014 7.1 6 2014 7. 33 2014 3.33
Budget 2015 6.93 Budget 2015 7. 28 Budget 2015 2.97
[22] EVCA Annual Report 2014/2015 May 2015 Financial statements BALANCE SHEET (in euros)
ASSETS 2014 2013 FIXED ASSETS
At cost, less depreciation 16,132 63,967
FINANCIAL ASSETS
Shares in EDC GmbH (33%) 8,329 8,329
CURRENT ASSETS
Receivables 143,792 211,628 Deposits and prepayments 8,481 69,969 VAT 53,226 59,597 Deferred charges 1. 297,372 453,299 Accrued income 8,009 7,099 Cash at bank 3,944,675 4,167,251 TOTAL CURRENT ASSETS 4,455,555 4,968,841
TOTAL ASSETS 4,480,016 5,041,137
LIABILITIES 2014 2013 GENERAL RESERVES
Opening balance 3,499,047 3,157,819 Attribution of profit (+) / loss (-) -164,449 341,228 Closing balance 3,334,597 3,499,047
PROVISIONS 6,800 19,181 PROVISION EVENTS RISK 2. 0 241,889
CURRENT LIABILITIES
Suppliers 360,289 582,404 VAT 21,826 9,568 Payroll accruals 494,376 491,155 Deferred income 3. 238,127 169,893 Capital contribution to leasehold improvement 4. 24,000 28,000 TOTAL CURRENT LIABILITIES 1,138,618 1,281,021
TOTAL LIABILITIES 4,480,016 5,041,137
Notes 1. 2015 events accommodation contracts signed in 2014. 2. Change in the accounting policies of the provision events risk and working without provision. 3. Deferred income includes services (EVCA Events & Academy) invoiced in 2014 to be delivered in 2015. 4. Landlord capital contribution for the amount of 36K related to the office move and amortised on the period of the lease (9 years) since 2012. €
May 2015 EVCA Annual Report 2014/2015 [23] Financial statements PROFIT AND LOSS (in euros)
ACTUAL 2014 BUDGET 2014 ACTUAL 2013 Membership 1. 5,578,314 5,455,000 5,347,385 Events 2. 1,216,982 1,348,620 1,318,492 Sponsoring 237,000 256,000 236,000 Service fees 60,000 60,000 232,645 Bank interest and miscellaneous 25,631 30,000 33,088 Other revenue 46,828 37,000 50,026 TOTAL REVENUE 7,164,756 7,186,620 7,217,636
Personnel costs 3,262,705 3,256,000 2,918,857 Professional services 1,492,252 1,628,180 1,735,648 Housing costs 229,627 244,091 233,179 Accomodation events 3. 425,811 583,880 560,567 Travel and representation 489,826 458,780 499,365 Communications 88,693 103,500 151,241 Printing and audio-visuals 201,082 194,870 197,150 Various office costs 412,022 475,069 467,572 Finance costs 31,037 27,250 37,049 Provision for doubtful debtors 163,536 155,000 69,032 Provisions/other costs 3. 141,460 60,000 17,593 TOTAL EXPENSES 6,938,051 7,186,620 6,887,252
NET OPERATING RESULTS excl. Non cash credit entries 226,705 0 330,384 Long term provisions 4. 241,889 0 10,844 NON CASH CREDIT ENTRIES 241,889 0 10,844
NET OPERATING RESULTS incl. Non cash credit entries 468,594 0 341,228 Projects 2013 finalized in 2014 329,975 330,000 0 Long term investment – European database project 176,000 200,000 0 Long term investment – Brand project 127,068 100,000 0 TOTAL EXCEPTIONAL EXPENSES 633,043 630,000 0
NET RESULT -164,449 -630,000 341,228
Notes 1. Level of membership above expectations. 2. Lower level of “Events” registrations for the EVCA Symposium than anticipated. 3. Specific costs related to Events budgeted in “Accomodation events” but recorded in Actual 2014 in “Provision/Other costs.” 4. Reversal of “Provisions events risk” given change in accounting policies.
[24] EVCA Annual Report 2014/2015 May 2015 Financial statements BUDGET 2015 (in euros)
PROFIT AND LOSS BUDGET 2015 ACTUALS 2014
Membership 1. 5,475,000 5,578,314 Events 2. 1,141,345 1,216,982 Sponsoring 2. 199,000 237,000 Service fees 60,000 60,000 Bank interest and miscellaneous 17,500 25,631 Other revenue 37,000 46,828 TOTAL REVENUE 6,929,845 7,164,756
Personnel costs 3,214,000 3,262,705 Professional services 1,610,830 1,492,252 Housing costs 240,431 229,627 Accommodation events 3. 324,836 425,811 Travel and representation 499,240 489,826 Communications 95,900 88,693 Printing and audio-visuals 3. 152,350 201,082 Various office costs 4. 502,058 412,022 Finance costs 29,000 31,037 Provision for doubtful debtors 155,000 163,536 Provisions/other costs 106,200 141,460 TOTAL EXPENSES 6,929,845 6,938,051
NET OPERATING RESULTS excl. non cash credit entries 0 226,705 Long term provisions 0 241,889 NON CASH CREDIT ENTRIES 0 241,889
NET OPERATING RESULTS incl. non cash credit entries 0 468,594 Projects of prior year completed in current year 227,000 329,975 Long term investment – European database project 24,000 176,000 Long term investment – Brand project 79,000 127,068 Long term investment – IPO index 25,000 0 TOTAL EXCEPTIONAL EXPENSES 355,000 633,043
NET RESULTS -355,000 -164,449
GENERAL RESERVES BUDGET 2015 ACTUAL 2014 Opening balance 3,334,597 3,499,047 Attribution of profit (+) / loss (-) -355,000 -164,449 Closing balance 2,979,597 3,334,597
Notes 1. Net Membership aligned to 2014. 2. Decrease of “Events” registrations and “Sponsoring” following cancellation of two EVCA events in 2015. 3. The decrease in “Accomodation events” and “Printing & audio-visuals” following cancellation of EVCA events in 2015. 4. Increase of IT costs.
May 2015 EVCA Annual Report 2014/2015 [25] SUMMARY OF SIGNIFICANT AUDITOR’S REPORT ACCOUNTING POLICIES > FIXED ASSETS Fixed assets are stated at cost less accumulated depreciation. Depreciation is provided over the estimated useful lives of assets using the straight line method.
> CASH OR CASH EQUIVALENTS Cash and cash equivalents are carried at nominal value.
> RECEIVABLES Receivables are carried at nominal value. Provisions are made for all unpaid membership and services fees during the year. All other receivables are written off if they are outstanding for more than one year and no explicit confirmation or certainty about payment is available.
> PROVISIONS Provisions are recognised for probable obligations when a reliable estimate of the amount can be made. Change from 2014: the board of directors has decided to cancel the provision events risk. The impact on the profit and loss 2014 amounts to a non cash credit entry of 241.889 . € > LIABILITIES Trade payables and payroll liabilities are carried at nominal value.
> REVENUE RECOGNITION Revenue is recognised to the extent that it is probable that the economic benefits will flow to the association and the revenue can be reliably measured. With respect to the rendering of services, revenue is recognised by reference to the stage of completion.
The statutory financial statements can be viewed at the National Bank of Belgium and are presented in a different format than the financial statements in the annual report.
[26] EVCA Annual Report 2014/2015 May 2015 European Private Equity & Venture Capital Association Bastion Tower, Place du Champ de Mars 5, B-1050 Brussels, Belgium
The EVCA adheres to the European Transparency Register (ID number 60975211600-74)