June 30, 2013 - There were 913 venture capital deals in the US in Q2 2013 totaling $6.7B. This represents an increase over Q1 2013, but continues a slight decline of 3% in dollars raised on a rolling four quarter basis. 302 of the deals in Q2 2013 were first time financings, which totaled $1.1B. First time financings as a percentage of all venture deals increased slightly from Q1 2013 to represent 33% of deals and 17% of dollars raised.
June 30, 2013 - In Q2 2013, 44 US venture capital funds raised $2.9B, which was a 4% decrease in number of funds and an 18% fall in capital raised on a rolling four quarter basis. Consequently, average fund size also fell 15% to just $82MM.
May 9, 2013 - One of the highlights of last week was that the European Central Bank cut its benchmark policy rate by 25bp, to 0.5%, to counter mounting disinflationary pressure resulting from the ongoing euro area recession, with economic weakness increasingly spreading to core member states (Germany and France specifically) . The rate cut had been widely anticipated and largely priced in and the EUR – USD currency pair traded off slightly on the news. Also the euro area unemployment rate rose 0.1pp to 12.1% in March, reaching a new all-time high since the series started in 1993. It is not widely anticipated that the Labor market will improve significantly any time soon in the EUR area.
March 31, 2013 - There were 77 venture backed M&A transactions in Q1 2013 with $984MM in disclosed deal value. The number of transactions fell 4% on a rolling four quarter basis, while disclosed value fell 12%. However, the value of only 13% of transactions was disclosed in Q1 2013, while in 2012 the deal value was disclosed for an average of 26% of transactions. Consequently, the decrease in disclosed value is not necessarily representative of the health of the M&A market.
October 9, 2012 - Fund-of-funds have fallen out of favor in recent years due to strategic and structural issues. Historically, fund-of-funds have focused too much on diversification, to the detriment of their performance. With too much diversification, many have mimicked the average of their asset class of focus and, in venture capital, the average has struggled to justify the illiquidity over the last ten years. Further, fund-of-funds charge an additional layer of management fees on top of those charged by their portfolio funds. While these fees are gratuitous when performance merely achieves the asset class index, they are easily offset with outperformance of just 1% annualized above the index (analysis to follow). Fund-of-funds also remain prudent for particular asset classes, including venture capital, and for particular investors, including those with either too low or too high a level of assets under management to diversify appropriately.