To find out more about the European Private Equity and Venture Capital Association please visit: www.evca.eu Follow us on Twitter @EVCA_EU Contents
Chairman’s overview Chief Executive’s report
4 6
Governance Political advocacy
8 10
Industry promotion Industry excellence
12 18
Data and research Financial report
20 22
May 2014 EVCA Annual Report 2013/2014 Chairman’s overview
The past year brought encouraging signs that Europe is getting back on a growth track; that’s not just good news for private equity and the businesses it backs but also for European citizens.
GEORGE ANSON CHAIRMAN George Anson is one of private equity’s most respected investors. He manages HarbourVest Partners (U.K.) Limited, which supports HarbourVest’s investment and client service activities in Europe. George serves on the advisory boards of funds managed by BC Partners, Cinven and IK Investment Partners. He is a member of the EVCA Board of Directors, and is the EVCA’s Chairman for 2013/14.
[4] EVCA Annual Report 2013/2014 May 2014 When I was appointed Chairman, there It is worth noting that independent was a lack of confidence in Europe studies have shown that private equity €35.7 billion was as an investment destination, largely boosts innovation, competitiveness because the sovereign debt crisis had and productivity in the companies it invested in European blinded international investors to the invests in. These three attributes are businesses in 2013. fundamental qualities of the European necessary to get the economy moving Union. in the right direction, as has been recognised by national governments Fortunately, Europe has reasserted across Europe. itself. The economic crisis is largely Communication about our industry overcome in the major economies Private equity’s contribution to jobs is vital, especially after the European of the UK, Germany and the Nordic and growth is increasingly recognised Parliament elections in May and the countries. Other nations such as by policymakers. The European appointment of a new European Ireland are also expected to return to Commission’s proposals for structural Commission in November. These growth. reform of Europe’s banks exempted events will shape the behavior and private equity and venture capital attitudes of the EU’s leadership for the This should come as no surprise from a ban on proprietary trading, next five years. because Europe is a great place to do citing their value in providing long- business, not to mention the world’s It is up to the EVCA to engage early term finance to the real economy. largest single market. It offers political with these influential politicians so stability, strong governance and a There is also a growing understanding that the good work of recent years hugely diverse pool of market-leading that it is not just the businesses and the much improved understanding companies, innovative start-ups and that stand to benefit from private of the industry is not diminished small-to-medium-sized enterprises equity investment. Pension funds by the institutional changeover. Of (SMEs). Private equity fundraising and insurers, long-term investors, course that can only be achieved improved considerably in 2013, as pick private equity funds because it with the support and mandate of our international institutional investors delivers the returns they need to pay membership. reawoke to those qualities. our pensions and insurance claims. As a man who has enjoyed a long The European IPO market also That’s why the EVCA was vocal in career investing in Europe, I am appears in good health, with a number its opposition to the introduction pleased to see it on the road to of successful flotations of private of capital requirements to the renewed recovery and I am proud equity-backed companies, such as the revised Institutions for Occupational that European private equity is UK’s Merlin Entertainments and Italy’s Retirement Provision Directive and helping it on its way by building great Moncler. These successes should why we continue to campaign for a businesses, investing in innovative further help the fundraising climate more appropriate risk-weighting for new ideas, giving struggling and improve investor sentiment, private equity under the Solvency II companies a boost and bringing leading to more investment. capital law for insurers. expertise, patient capital and growth to entrepreneurs and business- Of course, challenges remain It is vital for the sake of the industry owners. to Europe’s economic recovery. and for European business in general, Significantly businesses are still that these investors are not deterred I would like to thank Dörte Höppner struggling to access finance. from long-term investment vehicles, and the other members of the EVCA Traditional sources of financing, such as private equity funds, by being Secretariat for providing excellent such as banks, have not been lending forced to hold disproportionate levels service to our members. Their support to companies, which have found it of capital for what is after all, an has been of tremendous help to both difficult to grow as a result. This has a illiquid asset class. the Board of Directors and myself in knock-on effect on the wider economy, the past year. I am pleased that during my in terms of job creation, for example. Chairmanship we have been able On behalf of the Board of Directors, European private equity, including to build on a strong foundation of I would also like to express my thanks venture capital, has been playing proactive communication through and gratitude to those members who an important role in helping to events, research, reports, face-to-face will be retiring from the Board at bridge that gap, providing long-term meetings with influential policymakers this year’s OGM. Francesco Loredan, finance to the real economy through and media outreach. I have also Claudio Sposito, Vincenzo Morelli investment in businesses. 35.7 billion worked to foster stronger ties with and John Holloway have provided € was invested in European businesses national private equity associations many years of valuable experience in 2013. worldwide to ensure our points of and advice. We are grateful for their view are as joined up as possible. contribution.
May 2014 EVCA Annual Report 2013/2014 [5] Chief Executive’s report
The debate has moved on from, ‘what is private equity?’ to, ‘what private equity can do for Europe.’
Dörte Höppner CHIEF EXECUTIVE Dörte represents the industry at the highest levels of business and government. Prior to the EVCA, Dörte was Managing Director of BVK, the German private equity and venture capital association.
[6] EVCA Annual Report 2013/2014 May 2014 As we approach a period of significant upheaval in both the European European private equity managers, venture Parliament and European Commission, it is extremely important that capitalists, their investors and stakeholders must European private equity managers, speak with one unified voice. venture capitalists, their investors and stakeholders speak with one unified voice. The EVCA, the world’s largest private equity association, is that voice; engaging proactively and constructively with European and global policymakers to ensure the conditions are right to encourage Our Public Affairs and when we introduced the LP Platform, the industry’s ability to transform Communications teams have been we have welcomed more than 100 businesses through patient capital. busy ensuring that the industry such members into the EVCA. is rightly understood as part of In July 2013, private equity became George’s successor Anne Glover the solution to the lack of long- regulated at European level for the is an experienced and respected term business finance in Europe. first time. It is fair to say the period venture capitalist. While the EVCA Significant progress has been made leading up to this landmark moment has certainly grown over the years but the elections to the European had its challenges. However, we now to encompass investors and other Parliament and the appointment of a have the Alternative Investment Fund stakeholders, we are always conscious new European Commission calls for a Managers Directive (AIFMD), which and proud of our beginnings. renewed effort. while not perfect, is considerably European venture capital remains one more suitable than the first iterations We are leading on the creation of a of the Secretariat’s top priorities and suggested it would be. Not only that pan-European database of European we all look forward to working with but it has real potential as a marketing private equity activity, which will Anne. passport and quality label. be the authoritative source of Thanks to the support of our members information about our industry, and The creation of the European Venture and the dedication of our staff, the on the continuing evolution of the Capital Funds Regulation (EuVECA), a EVCA has made great strides over the industry’s professional standards. voluntary alternative for smaller funds past 12 months. I would like to express to the AIFMD that will spare them Alongside this work, we have my gratitude to our members for disproportionate compliance costs continued to provide a first-class giving us the mandate to speak for the and facilitate cross-border fundraising, service to our members. We’ve industry. is another example of how effective welcomed Steinar Liverud who is now The Annual Report, which includes our approach can be. the point of contact for all members a transparent breakdown of our seeking information on our work. Looking forward to the next year it is finances, shows the benefits of EVCA clear that we have to build on those From our cutting edge suite of events membership, the achievements of the successes and the wider successes and training courses to member last year and sets out our future plans. of the EVCA’s communications drive. exclusive publications, reports and If you are a policymaker or a member That initiative made great strides guides, our focus is firmly on offering of the public, please take the time to in explaining the beneficial effects useful support to your work in our learn a little more about the EVCA’s of private equity investment on industry, regardless of which branch work on behalf of a fascinating European businesses and Europe’s you operate in. industry. economy as a whole. Last year also saw the appointment If you are lucky enough to be a part of Indeed, the debate among of the first EVCA Chairman to come European private equity but are not policymakers in Brussels has now from the investor community, George yet an EVCA member, please do get in moved on from, ‘what is private Anson. His appointment demonstrated touch with us to discuss how joining equity?’ to, ‘what private equity can our commitment to this important could benefit you and the industry as do for Europe.’ thread of our membership. Since 2010, a whole.
May 2014 EVCA Annual Report 2013/2014 [7] Governance
The EVCA would like to acknowledge the commitment and thank the members of the EVCA Board of Directors, Platform Councils and Committees 2013/2014 for their contribution to the industry.
GEORGE ANSON ANNE GLOVER John HOLLOWAY 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 Simon Witney WILLIAM Watson Venture Capital Platform Large Buyout Tax, Legal and Regulatory Professional Standards EVCA Vice-Chairman EVCA Vice-Chairman Committee Committee Chairman Chairman
[8] EVCA Annual Report 2013/2014 May 2014 The EVCA is committed to fully and Christian Hinze BlackRock Schweiz Tax, Legal & Regulatory fairly representing the interests of Asset Management | Dan Kjerulf Committee each segment of its membership. To Danske Private Equity | Michael Chairman Simon Witney King & Wood achieve this, members are organised Lindauer Allianz Capital Partners | Mallesons SJ Berwin | Vice-Chairman into four so-called “platforms”, which Klaus-Björn Rühne ATP Private Equity Patricia Volhard P+P Pöllath + are a reflection of the actual market Partners | Helen Steers Pantheon | Partners | Members Gitte Bedford segments: Limited Partners, Venture Claus Stenbaek Keyhaven Capital Robert Bosch Venture Capital | Capital, Mid-market Private Equity and Partners Rachel Thompson Bridgepoint | Large Buyout. Jay Modrall Norton Rose Fulbright The Platforms are each led by a Mid-market Platform Council Regional Representatives Phil Council composed of industry Bartram Travers Smith | Ana Sofia practitioners, elected by the EVCA Vice-Chairman Craig Batista Abreu Advogados | Fabio membership. Donaldson HgCapital | Members Brunelli Di Tanno e Associati | John Barber Bridgepoint Advisers Ltd. These Councils work with the EVCA Fiona Cooper Apax Partners | Piotr Secretariat, to develop tailored Trond Bjørnøy Norvestor Equity | Dulewicz Dentons | Gilles Dusemon services for the four platforms, which Andreas Fendel Quadriga Capital Arendt & Medernach | Felix Haldner are then delivered by the Secretariat. Beteiligungsberatung | Karsten Partners Group | Jakob Mosegaard Langer Riverside Europe | José Maria The work of the EVCA is supported Larsen Nielsen Nørager | Marco Muñoz MCH Private Equity Investments de Lignie Loyens & Loeff | Martin by the two main committees, the Anne Rannaleet IK Investment Professional Standards Committee Nilsson Mannheimer Swartling | Robin Partners | Claudio Sposito Clessidra Painter Proskauer | Bernard Peeters and the EVCA Tax, Legal and SGR | Thibault Surer Astorg Partners | Regulatory Committee, which are Altius/Tiberghien | Isabel Rodriguez William Watson Value4Capital | supported by various sub-committees King & Wood Mallesons SJ Berwin Ralph Wyss Gilde Buy Out Partners and working groups. Christian Schatz King & Wood Venture Capital Mallesons SJ Berwin | Jyrki Tähtinen Borenius Ltd | Sylvie Vansteenkiste Board of Directors Platform Chairman 2013-2014 George Anson King & Wood Mallesons SJ Berwin EVCA Vice-Chairman Joey Mason France Vassaux AFIC | Members HarbourVest Partners | Past-Chairman Delta Partners | Members 2012-2013 Vincenzo Morelli TPG of the Tax, Legal and Regulatory Alex Brabers Gimv | Hendrik Brandis Committee Working Groups Capital | EVCA Chairman-Elect Anne Earlybird | Uli Fricke Triangle Venture Glover Amadeus Capital Partners | Capital Management | Anne Glover Joey Mason Delta Partners | EVCA Professional Amadeus Capital Partners | Sven Standards Committee Vice-Chairmen Craig Donaldson Lingjaerde Endeavour Vision | Denis Chairman William Watson HgCapital | John Holloway European Lucquin Sofinnova Partners | Alain Value4Capital | Vice-Chairman Marta Investment Fund | Joanna James Parthoens Vesalius BioCapital | Jankovic APG Asset Management Advent International | EVCA Treasurer Daniel Sanchez Nauta Capital VC Members Andrew Bennett Nordic Joey Mason Delta Partners | Partners | Jam Westerhues Robert Capital | Margaret Chamberlain Members John Barber Bridgepoint Bosch Venture Capital | Alberto Travers Smith | Christian Diller Advisers | Alex Brabers Gimv Trombetta Finlombarda Gestioni | Montana Capital | George Georgiou Marleen Groen Greenpark Capital/ Peter Van Gelderen ICOS Capital Capital Dynamics | Dan Kjerulf Danske StepStone Group | Michael Lindauer Management Allianz Capital Partners | Francesco Private Equity | Therése Lennehag Loredan BC Partners | Rory Macmillan European Private EQT | Jonathan M. Martin KPMG | The Carlyle Group | Claudio Sposito Equity Roundtable Vincent Neate KPMG | Alain Clessidra SGR Platform Council Parthoens Vesalius Biocapital | (Large Buyout) Sonya Pauls King & Wood Mallesons Limited Partners SJ Berwin | Simon Powell Advent Platform EVCA Vice-Chairman Joanna James International | Andreas Schober Advent International | Members EVCA Vice-Chairman John Holloway Hannover Finanz | Members of the Ludo Bammens Kohlberg Kravis European Investment Fund | Members Professional Standards Committee Robert & Co. | Christopher Crozier George Anson HarbourVest Partners Working Groups Permira Advisers | Francesco Loredan Anne Fossemalle EBRD | Marleen BC Partners | Rory Macmillan The Groen Greenpark Capital/StepStone Carlyle Group | Vanessa Maydon Group | Neil Harper Morgan Cinven StanleyAlternative Investment |
May 2014 EVCA Annual Report 2013/2014 [9] Political advocacy
Policymakers increasingly agree private equity can provide long-term finance to Europe’s businesses, at a time when such patient capital is scarce.
MICHAEL COLLINS Director of Public Affairs Michael has 18 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 2013/2014 May 2014 The Public Affairs team engages with had implemented the AIFMD into has agreed to undertake a detailed European and global policymakers to national law. That’s frustrating as feasibility study on EVCA’s proposal to ensure the regulatory conditions are many of our members worked hard to create a pan-European programme of in place to encourage private equity’s meet deadlines that were then missed public and private funds to invest in investment in Europe’s businesses. by national supervisors; the industry European venture capital. The last year brought success needs legal certainty to operate at its across the board, with EU lawmakers best and make the contribution it can Investor regulation increasingly recognising private to supporting Europe on its growth The team secured an exemption equity’s contribution to the long- track. for private equity from a ban on term financing of the real economy; a Consistent application of the AIFMD banks’ proprietary trading in the central theme of the policy agenda. across Europe is indispensable if a Commission’s proposal for the These are encouraging steps in the single market for European private structural reform of banks. The right direction but policymakers must equity is to be created. A number of proposal explicitly cited private encourage the best conditions for countries are imposing obligations equity’s role in the long-term investment in long-term investment on managers - such as levying a financing of the real economy as the vehicles, such as private equity fee, or mandating the use of a local reason for the exemption and will funds, whose engaged, patient capital paying agent – before they will allow allow banks to continue to take an boosts innovation, competitiveness, them to use the marketing passport equity stake in private equity funds. productivity and growth in the that they have been granted by The European Commission’s formal companies they back. The Commission their home supervisor. We feel such proposal to revise the EU regulation has also proposed new legislation requirements are not permitted under for workplace pensions, the IORP to create European Long-term the AIFMD and are contrary to the Directive, emerged this year and did Investment Funds (ELTIFs) – a new marketing passport that it established not impose new capital requirements brand that they hope will attract precisely to facilitate cross-border on these important long-term retail and smaller investors to commit fundraising and ultimately investment investors into private equity. Such capital to long-term asset classes. in companies. After EVCA members requirements would have deterred The EVCA is working with both the brought this to our attention, we pension funds from investing in European Parliament and member notified the European Commission private equity funds and prevented states to introduce greater flexibility and European Securities and Markets engaged capital reaching European into the ELTIF framework to make it Authority (ESMA) and our concerns business. This is a significant success more attractive to both investors and are now being investigated formally. for the EVCA and its coalition of fund managers. We continue our constructive partners from the pension fund The elections to the European dialogue with ESMA on a number of industry, the trade union movement Parliament in May and the outstanding implementation measures and the corporate sector. appointment of a new European and monitor national developments After extensive discussions with the Commission in November will bring in non-EU nations where regulators EVCA, regulators are now willing to many new faces to Brussels. The are bringing their laws more in line revise the risk-weighting that insurers team spent much of the last six with the AIFMD. We published AIFM will have to apply to their holdings in months preparing for the institutional Directive – Essentials, a members’ private equity under Solvency II. This changeover and hired Anna Lekston guidebook to the Directive and a not only sends the right message to as Senior Public Affairs Manager to guide to navigating Europe’s private investors more widely about private strengthen the team. Anna joins from placement regimes. equity but should also encourage the Polish representation to the EU. insurers to commit to the asset class. Venture capital Alternative Investment The Public Affairs team continues The EVCA played a leading role in to monitor global standards such as Fund Managers the creation of the European Union the Basel III rules and international Directive (AIFMD) Venture Capital Funds regulation, an regulation with the potential to impact The AIFMD, the pan-European alternative for smaller funds to the private equity such as the US FATCA. regulation which covers private AIFMD’s marketing passport. The You can find out more about the other equity, became law in July 2013. team produced a members guidebook regulatory and policy files that the Unfortunately by April 2014, only EuVeca Essentials to explain the Public Affairs team works on from the about half of the EU’s member states new regulation. The Commission EVCA website.
May 2014 EVCA Annual Report 2013/2014 [11] Industry promotion
The Communications team has spent the last year cementing the EVCA’s status as an industry thought-leader while explaining how private equity makes a significant contribution to the long-term financing of the real economy through investment in European companies.
EMMA THORPE DIRECTOR OF COMMUNICATIONS & EVENTS Emma has 17 years experience in financial services and corporate communications. Past experiences include European Communications Director at a global private equity firm.
[12] EVCA Annual Report 2013/2014 May 2014 COMMUNICATIONs policymakers. These case studies give The Communications team promotes examples of private equity investment European private equity to the across Europe and will ultimately The website press, policymakers, international number more than 200 – at least one was completely for each major region. investors and the public through redesigned to media outreach, digital content, Work is also continuing on a film about presentations and publications. the advantages of venture capital improve the overall The elections to the European investment for entrepreneurs, which user experience with Parliament and the appointment of a will be accompanied by a guide. The new European Commission this year film follows on from the successful better navigability calls for a renewed effort to ensure How Private Equity Works animation, and exclusive that the benefits of private equity which has been viewed about 15,000 investment to businesses and the times since its launch. members only economy are understood. Since the last Annual Report, the content. The Communications team was EVCA press office has built up a solid strengthened with a new hire, presence on Twitter and LinkedIn. Andreas Gahleitner, who joined as Social media content is updated daily Communications Assistant. This and is effective in drawing attention completed the previous year’s goal to our messages, blogs, events and of building up a skilled press office, videos. A daily press round-up is also which spent 2013 developing strategy emailed to members. and building relationships with national news media across Europe. Publications and Positive coverage was secured in presentations outlets including the Wall St Journal, Expansion, Corrierre della Serra, Les The Communications team supported Echos, L’Agefi Suisse, De Telegraaf, the the Public Affairs, Research and Independent, Bloomberg TV, CNBC Events team in the production of a and CNN. number of publications including members’ guides to regulation, the Digital media annual private equity activity statistics and marketing materials. The website was completely redesigned to improve the overall user A particularly successful publication experience with better navigability was Exploring the impact of private and exclusive members-only content. equity on economic growth in Europe, It provides an excellent platform for which a separate policymaker for regular blogs, analysis, data and Briefing was also designed and videos that support the EVCA’s overall written. This independent study strategy to engage in thoughtful demonstrated that private equity debate with stakeholders and explain investment boosts innovation, clearly the benefits of private equity competitiveness and productivity by focusing on its impact on growth. in businesses. The report won The website is regularly updated widespread coverage across influential with new content, on issues including European print and broadcast media. the European Parliament elections The Chief Executive, Chairman and and long-term investment, video other EVCA staff continue to fly the interviews with practitioners and flag for the industry, speaking at policymakers. industry events across the world. This In preparation for the elections, year saw speeches and presentations the team has been developing an made in Seoul, Tokyo, Beijing, Hong interactive map of case studies for Kong, the US and across Europe.
May 2014 EVCA Annual Report 2013/2014 [13] Industry promotion
EVCA conferences offer industry stakeholders exceptional networking, insightful debate, expert speakers and thought leadership
EVCA Handbook Professional Standards for the Private Equity and Venture Capital Industry Edition January 2014
Act in fairness Do no harm to the Industry
anD E Equity an privat EuropE ssoCiation E Capital a vEntur
AIFMD Act with Essentials integrity
A guide to the Hotel InterContinental Vienna, Austria Alternative Investment 11–13 June 2014 Maintain Fund Managers Directive confidentiality Keep your promises EVCA Vienna 2014
Symp sium Disclose conflicts of
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Lead Sponsor Exhibitor
The Symposium program was built with the guidance of a task force representing the EVCA membership
George Anson HarbourVest Anne Glover Bill Watson Partners (U.K). Amadeus Capital Rory MacMillan Value4Capital Nigel Van Zyl Dörte Höppner Limited Partners Limited The Carlyle Group Holdings Limited Proskauer EVCA Representing Representing the Representing the Representing the Representing the Representing the the LP Platform VC Platform LBO Platform MidMarket Platform associate members EVCA Secretariat EVCA EVENTS EVCA
Financing new ventures and established enterprises 06 Summer 2013
The middle-market:
Financing new ventures Europe’s real Winter 2013 /14 and established enterprises economy strongman 07
In pursuit of prosperity: How Europe can climb the growth curve
[14] EVCA Annual Report 2013/2014 May 2014 Events the investor community. Speakers of Compliance and Public Affairs at The EVCA’s status as the world’s included Dave Bonderman, Founding PAI Partners, and regulatory legal largest private equity association Partner of TPG, Ryanair CEO Michael expert Patricia Volhard of Pöllath + enables it to offer a diverse, insightful O’Leary and the Financial Times’ Chief Partners. and relevant suite of events that Foreign Affairs Commentator Gideon The Venture Capital Forum in Rachman. brings delegates cutting edge thought November last year was notable for leadership, leading speakers and first- We look forward to an equally a palpable sense of optimism about class networking opportunities. successful Symposium in Vienna this the industry’s future. Attracting a Over the last year about 2,000 year. As always, the Symposium offers fascinating mix of venture capitalists, delegates, including 550 global LPs, unparalleled networking, speakers entrepreneurs and policymakers, the attended our events, which were held and analysis. This year it will focus on Forum was very well received and was in 20 cities in 14 countries. bolstering the industry’s status as a an excellent platform for extolling global influencer. Influential thought the virtues of investing in innovation. Not only are the events unmissable figures speaking this year include Philippe De Backer, Member of opportunities for industry practitioners Joschka Fischer and Peter Vessenes. the European Parliament, Roger to help shape the future direction They will discuss private equity’s Johanson, Head of Venture Capital & of the industry and debate new position as a transforming economic Infrastructure Investments at Skandia developments but they also provide a force that brings growth through Life Insurance Company and Babbel forum to demonstrate the advantages innovation, active ownership and CEO Markus Witte spoke at the event. of private equity to international entrepreneurship. The Forum returns to Berlin, one of investors and policymakers. Europe’s leading start-up capitals, in An excellent example of this was the Conferences November this year. Investor Seminar in Asia. An EVCA The Investors’ Forum is a unique event Following up from the inaugural delegation travelled to Japan and for private equity managers and their Corporate Venture Capital Summit in South Korea to discuss the advantages investors. It is the only industry event 2013, the EVCA held a second event European private equity with that offers a guaranteed 1:1 ratio of this year to encourage information institutional investors. We were joined manager to investor. As well as the sharing and networking. The Summit, by 170 potential investors. unbeatable networking the ratio an exciting development for a sector The calendar of conferences is fosters, the 2014 Forum welcomed of growing importance, is well on its complemented by Chairman’s Dinners global institutional investors from way to becoming the premier event with members across Europe, VC such influential organisations as the of its kind in Europe. After Work gatherings where the BP Pension Fund, China Reinsurance The third Responsible Investment VC community meets informally Company, Alaska Permanent Fund Summit, held in Brussels, took to discuss the industry and the Corporation and Canada Pension Plan long-term investment as its theme. Next Generation Network – these Investment Board. Speakers included The long-term financing of the real are informal events where young China Investment Corporation’s economy is of paramount importance practitioners get together. These Managing Director and Head of to EU policymakers, many of whom events give members an opportunity Private Equity Investment Department attended this increasingly popular to meet each other and the EVCA Dr Linbo He, and Dr Russell Read, event. Yves Leterme, then Deputy team to hear about our work, the Chief Investment Officer and Deputy Secretary-General of the OECD, Heinz Secretariat, raise any concerns and Chief Executive of the Gulf Investment discuss the industry at both national Corporation. We look forward to Zourek, the Director General of the and European level. seeing you again in Geneva in March European Commission’s taxation 2015. department and Wolf Klinz, author of the European Parliament’s report Symposium The CFO-COO Summit is the only on long-term investment, joined The Symposium in July 2013 was industry event designed by CFOs the debate alongside responsible a celebration of 30 years of the and COOs for their peers and offers investment experts, trade union association. Held in Istanbul, the expert commentary on FATCA and the representatives, academics and gala event marked more than AIFMD as well as vital advice in how to speakers from think-tanks. three decades of supporting and navigate evolving market conditions. representing private equity’s This year the Summit was held in Emma Thorpe took charge of the managers, investors and stakeholders London and welcomed as speakers Events team this year, which was and witnessed the appointment of the Alastair Breward, COO at Amadeus boosted by the hiring of Rachelle first EVCA Chairman to come from Capital Partners, Blaise Duault, Head Young as Conference Advisor.
May 2014 EVCA Annual Report 2013/2014 [15]
Industry excellence
The EVCA has been the guardian of the industry’s professional standards for more than 20 years. Dörte Höppner CHIEF EXECUTIVE
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 abide by.
[18] EVCA Annual Report 2013/2014 May 2014 The development and promotion The committee reviewed and updated their careers. The classes are based of high professional standards is the Handbook of Professional on active learning with up to date, real one of the EVCA’s most important Standards and organised a Training life case studies and are taught by roles. A combination of training, the Trainers webinar, which taught leading industry figures, experts and education, expert analysis and practitioners how to use the academics. regular reevaluation demonstrate the Handbook to train fellow staff. Both This year saw the development of EVCA’s commitment to safeguarding the webinar and the corresponding the principles that govern industry presentation are on the website. a brand new course, the Regulatory practitioners’ behaviour now and in & Legal Course for Private Equity the future. Handbook Fund Managers. This three day class The Handbook of Professional focuses on regulation affecting private Professional Standards sets out the principles equity including the Alternative Standards Committee of accountability, transparency and Investment Fund Managers Directive The Professional Standards governance that our members abide and standards such as fundraising, Committee, chaired by KPMG’s by. It requires both private equity fund marketing, governance and Vincent Neate, develops guidelines managers and their investors to keep financial crime. Grounded in the and best practices for European their promises, act in fairness and Handbook and designed by the private equity. It makes direct integrity, maintain confidentiality and Professional Standards and Tax, Legal recommendations to the Board of disclose any conflicts of interest. It is & Regulatory Committees, it gives EU Directors on professional standards reviewed and updated every year, to and non-EU fund managers a detailed and responsible investment issues. take account of recent developments understanding of the European and and to make sure it remains in line Over the last year, the committee was international regulatory frameworks. refreshed with four new members, with current market realities and including two participants from practices. Also, the Academy continued to hold a variety of tutorials across Europe. You can find out about the suite of indispensable training courses on The development and promotion of high www.evca.eu. professional standards is one of the EVCA’s most Responsible Investment important roles Roundtable The Responsible Investment Roundtable is a sub-group of the Professional Standards Committee and has a particular focus on private equity managers, Simon Published for the first time in 2012, promoting Environmental, Social and Powell of Advent and Andreas it replaces the separate private Governance (ESG) practices among Schober of Hannover Finanz, Sonya equity managers and institutional Pauls, a lawyer from King and Wood investors’ guidelines that existed EVCA members. Mallesons and Jonathan Martin of beforehand. It combines the Code Chaired by Therése Lennehag of EQT KPMG. Its sub-committees have also of Conduct, Governing Principles and co-chaired by Marta Jankovic of widened their scope and attracted and the Corporate Governance APG, the Roundtable oversees the new members. Guidelines together in one document. Academy’s Integrating Responsible In response to an increasing number The International Private Equity Investment course and organises a of member queries in relation to and Venture Capital Valuation and series of ESG Seminars across Europe, accounting standards and the IPEV Investor Reporting Guidelines, as well most recently in Frankfurt. Valuation and Investor Reporting as the Code of Conduct for Placement The Roundtable is also consulted Guidelines, the PSC decided to set up Agents, are also part of the Handbook. during preparations for the a new Working Group on Accounting The Handbook is also the foundation Standards, Valuation and Reporting. and an integral part of the EVCA Responsible Investment Summit The Working Group will function as training courses. and other EVCA conferences where an expert panel addressing member responsible investment is on the requests and questions in the fields of EVCA Academy agenda. January’s Responsible Accounting Standards, Valuation and The EVCA Training Academy offers Investment Summit was particularly Reporting, and providing consistent, a unique range of courses designed successful and attracted both best practice guidance. to help practitioners at each stage of European and global policymakers.
May 2014 EVCA Annual Report 2013/2014 [19] Data & research
We provide practitioners and EU and global policymakers with robust data that demonstrates private equity’s contribution to the economy.
Cornelius Mueller Head of Research 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 2013/2014 May 2014 The EVCA is the authoritative source Information on fundraising, of European private equity activity investment and divestment was data. Collecting comprehensive monitored for about 1,900 private This year saw industry data on a quarterly and equity and venture capital firms significant progress annual basis, the research team across Europe. As well as the EU’s towards the creation provides practitioners, press, 28 member states, data is collected academics and European and global for countries such as Norway and of a pan-European policymakers with robust data that Switzerland. database of private illustrates private equity’s contribution The 2013 data was published on equity activity. to the economy through investment in the relaunched EVCA website and companies. in the EVCA Yearbook. The team also provides custom data for EVCA Pan-European database members. The creation of a pan-European database will set new standards During the year, the EVCA publishes of transparency and clarity in the quarterly updates and responds to an collection of private equity activity average of 50 information requests a data. month from academics, think tanks, consulting companies and journalists Over the last 12 months, a legal across Europe. agreement was signed by the EVCA and Europe’s national private equity Thought leadership and venture capital associations. In the last year, the team wrote a Under the framework, all the report for the OECD’s European associations are legal shareholders in Entrepreneurship at a Glance, the database, which will be the first of which put European venture capital its kind in Europe. activity in a global context. They also This is a significant step, which will presented research demonstrating allow work to begin on the setting-up venture’s positive influence on start- and maintenance of the database. up companies to the World Economic Progress was and will continue Forum, boosted the visibility of to be made on issues including IT corporate venture capital statistics at development and harmonisation the second EVCA Corporate Venture of methodology and collection Capital Summit and provided insights techniques across Europe. on SME trends for the European Centre of Policy Studies. EVCA data Activity report appeared in the Wall St Journal, The Economist, Bilan, Corriere della Sera, The EVCA Pan-European Private La Tribune and many other leading Equity and Venture Capital publications. Activity Report 2013 is based on independently collected data from industry practitioners with the help of European national associations.
May 2014 EVCA Annual Report 2013/2014 [21] Financial report
Profit and Loss 3. In 2013, there was a decrease Budget 2014 of 20% of events and academy Operating revenues decreased by For 2014, EVCA proposes a balanced 9% to reach 7,217,636 in 2013, revenues due to cancellation of € budget before exceptional projects. compared to 7,941,314 in 2012. an academy course dedicated to € Operating expenses were 6,887,252 Limited Partners. The profit made in 2013 will be € in 2013, 13% less than 2012’s total of The 2013 operating costs are below reinvested in order to finalize 7,885,893. projects intiated last year. € budget because: The 2013 net operating profit, before 1. New Public Affairs and The EVCA has decided to fund two exceptional results, was 330,384, one-off special projects with positive € Communication team members compared to profit of 55,421 in 2012. long-term impact on EVCA’s service € joined the team later than anticipated. level: the building of the European The 2013 net accounting profit, Database and the brand development including one exceptional non-cash 2. Various projects were moved, project. entry was 341,228. € leading to them being transferred to the Budget 2014. This is the main Budgets have also been allocated The main year-on-year differences in to the activities of the four EVCA revenue are because: factor explaining the operating profit of 330,384. Platforms, as well as to the € 1. Income from membership fees, Professional Standard Committee representing 74% of the EVCA’s Balance Sheet and the Tax, Legal and Regulatory revenues, dropped by 5%, slightly Committee within EVCA. There are The balance sheet total is 5,041,137. below budget. € also various task forces and working The cash position is 4,167,251 as € groups managed by the secretariat. 2. In 2013, the EVCA, with the PAE, at December 31, 2013 compared to 3,994,739 in 2012. Reserves As in previous years, the board will devoted significant resources to its € increased from 3,157,819 to closely monitor the financial situation political advocacy activities. The € 3,499,047, thanks to profit throughout the year. costs related to these efforts were € paid for by EPER, the NVCAs and generated. EVCA. EPER and the NVCAs alone Provision for event risk has been contributed 232,645 to these € adjusted according to current risks. activities.
Financial statements Evolution of REVENUE, expenSES and reserves (in millions of euros)
Revenue Expenses Reserves 2005 6.80 2005 6.79 2005 2.11 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 Actual Actual Actual 2010 8.46 2010 7. 52 2010 2.77
2011 8.79 2011 8.59 2011 2.97
2012 7.94 2012 7.75 2012 3.16
2013 7. 22 2013 6.87 2013 3.50
Budget 2014 7.1 9 Budget 2014 7. 52 Budget 2014 2.87
[22] EVCA Annual Report 2013/2014 May 2014 Financial statements BALANCE SHEET 2014 (in euros)
Assets 2013 2012 FIXED ASSETS
At cost, less depreciation 63,967 128,634
FINANCIAL ASSETS
shares in EDC GmbH (33%) 1. 8,329 0
CURRENT ASSETS
Receivables 211,628 151,608 Deposits and prepayments 2. 69,969 67,738 VAT 59,597 95,177 Deferred charges 3. 453,299 402,396 Accrued income 7,099 8,352 Cash at bank 4,167,251 3,994,739 TOTAL CURRENT ASSETS 4,968,841 4,720,010
TOTAL ASSETS 5,041,137 4,848,645
Liabilities 2013 2012 GENERAL RESERVES
Opening balance 3,157,819 2,965,154 Attribution of profit (+) / loss (-) 341,228 192,665 Closing balance 3,499,047 3,157,819
PROVISIONS 19,181 137,000 PROVISION EVENTS RISK 241,889 252,733
CURRENT LIABILITIES
Suppliers 582,404 663,866 VAT 9,568 32,777 Payroll accruals 491,155 419,175 Deferred income 4. 169,893 153,274 Capital contribution to leasehold improvement 5. 28,000 32,000 TOTAL CURRENT LIABILITIES 1,281,021 1,301,093
TOTAL LIABILITIES 5,041,137 4,848,645
Notes 1. EVCA Shares in the European Data Cooperative GmbH (33%). 2. Quarterly advance of social charges. 3. 2014 events accommodation contract signed in 2013 4. Deferred income includes services (EVCA Events & Academy) invoiced in 2013 to be delivered in 2014. 5. Landlord capital contribution for the amount of 36K€ related to the office move and is amortised over the period of the lease (9 years) since 2011.
May 2014 EVCA Annual Report 2013/2014 [23] Financial statements PROFIT AND LOSS (in euros)
ACTUALS 2013 bUDGET 2013 ACTUALS 2012 Membership 1. 5,347,385 5,605,000 5,607,545 Events and Academy 2. 1,318,492 1,581,960 1,597,582 Publications 0 0 200 Sponsoring 236,000 228,500 256,080 Service fees 3. 232,645 150,000 300,000 Bank interest and miscellaneous 33,088 30,000 66,850 Other revenue 50,026 37,000 113,058 Total Revenue 7,217,636 7,632,460 7,941,314
Personnel costs 4. 2,918,857 3,283,000 2,591,020 Professional services 1,735,648 1,684,805 2,390,915 Housing costs 233,179 243,656 456,763 Accomodation events 560,567 620,428 654,669 Travel and representation 499,365 533,410 493,984 Communications 151,241 149,500 138,729 Printing and audio-visuals 197,150 345,045 355,267 Various office costs 467,572 477,406 468,180 Finance costs 37,049 25,250 58,314 Provision for doubtful membership debtors 1. 69,032 155,000 84,000 Provisions/other costs 17,593 163,500 194,052 Total Expenses 6,887,252 7,681,000 7,885,893
Net operating results 330,384 -48,540 55,421
Old creditors 0 0 29,977 Long term provisions 5. 10,844 48,540 107,267 Exceptional non cash credit entries 10,844 48,540 137,244
NET RESULTS 341,228 0 192,665
Notes 1. Level of membership fees below budget expectations partially offset by a lower level of provision for membership debtors. 2. Lower level of registrations compared to budget given cancellation of a course. 3. Service related to AIFM Campaign in level 2 phase. 4. Recruitment of Public Affairs and Communication team members in 2013. 5. Use of the “event provision” following the cancellation of an academy course.
[24] EVCA Annual Report 2013/2014 May 2014 Financial statements BUDGET 2014 (in euros)
PROFIT and LOSS BUDGET 2014 ACTUALS 2013
Membership 1. 5,455,000 5,347,385 Events & Academy 1,348,620 1,318,492 Sponsoring 2. 256,000 236,000 Service fees 3. 60,000 232,645 Bank interest and miscellaneous 30,000 33,088 Other revenue 37,000 50,026 Total Revenue 7,186,620 7,217,636
Personnel costs 4. 3,256,000 2,918,857 Professional services 1,628,180 1,735,648 Housing costs 244,091 233,179 Accommodation events 583,880 560,567 Travel and representation 458,780 499,365 Communications 103,500 151,241 Printing and audio-visuals 194,870 197,150 Various office costs 475,069 467,572 Finance costs 27,250 37,049 Provision for doubtful membership debtors 1. 155,000 69,032 Provisions/other costs 60,000 17,593 Total Expenses 7,186,620 6,887,252
Net operating results 0 330,384
Long term provisions 0 10,844 Exceptional non cash credit entries 0 10,844
Net results before exceptional expenses 0 341,228 Projects 2013 due to be finalized in 2014 5. 330,000 0 Long term investment – European database project 6. 200,000 0 Long term investment – brand development project 6. 100,000 0 TOTAL Exceptional EXPENSES 630,000 0
NET RESULTS -630,000 341,228
GENERAL RESERVES BUDGET 2014 ACTUALS 2013 Opening balance 3,499,047 3,157,819 Attribution of profit (+) / loss (-) -630,000 341,228 Closing balance 2,869,047 3,499,047
Notes 1. Cashed in Membership fees aligned to 2013. 2. Slight increase in light of new sponsorship offering to Associate Members. 3. Services fees for the financing of the Public Affairs Executive (PAE). 4. Full year impact of the recruitment of Political Advocacy and Communication team members. 5. In 2013, various projects were delayed, leading to them being transferred to the Budget 2014. 6. Two projects with positive long-term impact on EVCA’s service levels will be funded by EVCA reserves.
May 2014 EVCA Annual Report 2013/2014 [25] ACCOUNTING POLICIES AUDITOR’S REPORT > 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 equivalent Cash and cash equivalent 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. In addition to that, the company provides for events risk losses on conference and trainings. The provision can be used up to limit of the budgeted net operating margin per cancelled event or the net loss per event budgeted at break even and funded via setting aside 10% of the realised net operating margin contribution of each profitable event. The provision will be capped to two times the maximum utilization during the last five years.
> 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 company and the revenue can be reliably measured. With respect to the rendering of services, revenue is recognised by reference to the stage of completion.
[26] EVCA Annual Report 2013/2014 May 2014 European Private Equity & Venture Capital Association Bastion Tower, Place du Champ de Mars 5, B-1050 Brussels, Belgium
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