Despite challenging capital markets and general economic
uncertainty, signs point to increasing optimism among the Canadian
private equity and venture capital investing community, according
to a recent survey conducted jointly by McCarthy Tétrault
and the Canadian
Venture Capital & Private Equity Association (CVCA).
Members of the CVCA were surveyed from November 9-18 on such topics
such as their investment planning and exit planning expectation and
their views of the investment climate in Canada and abroad.
We presented the survey results at the CVCA's professional
development session, "Fasten Your Seatbelts: Investing and
Exiting in Turbulent Times" held on November 23, 2011.
Somewhat surprisingly, respondents were quite optimistic about the
overall investment climate in Canada over the next six months.
According to the report, 80 per cent of respondents say the
investment pace over the next six months will be consistent with,
or more active than, the previous six months. Few respondents were
interested in holding back and curtailing on transaction activity,
with fully 86 per cent looking to make new investment or invest in
existing portfolio companies in the next six months.
On a global comparison, respondents felt that Canada's
investment climate was better than Europe (73%), Africa (53%) and
Middle East (51%). Looking south of the border, 87 per cent of
respondents felt that Canada's climate was similar to or better
than the U.S.
The survey offers other insights into the Canadian private equity
and venture capital marketplace. Here are six general observations
that can be made of the survey results:
- There is general optimism about the investment climate.
- Members intend to focus capital on new investments.
- Access to debt capital is not seen as a hindrance for most.
- Some challenges are expected in the exit environment.
- Few are optimistic about an IPO market revival.
- Return expectations are realistic; there is limited expectation for improvement, but returns are not expected to get worse.
Learn more by reading the slide deck of my presentation discussing the results of this survey.
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