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German VCs beat US firms

Venture capital investments in German companies have generated higher average returns than US deals in the last decade, new research has found.

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Venture capital investments in German companies have generated higher average returns than US deals in the last decade, new research has found.

The Munich-based Centre of Private Equity Research (CPER) has revealed that the German VC market has made an average gross return of more than 11 per cent since 1998. The figure for VCs on the other side of the Atlantic is less than eight per cent.

Although the German economy is the largest in Europe, the VC market is only the third biggest in the region after France and the UK.

Following the dotcom crash, the number of German funds fell by 75 per cent to fewer than 30. Investors from Earlybird, Target Partners and Wellington Partners, the three largest German firms, presented the findings of the report to prospective investors. Spokesmen from the firms argued that the small size of the German market has enabled investors to be highly selective about opportunities. 

The report comes shortly after Holtzbrinck Ventures raised a €177m fund to invest in small media and consumer internet companies in Germany. 

Picture: Source