There's Some Optimism Out There - Survey of Private Equity and Venture Capital Professionals Finds a Positive Investment Climate in Canada
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.
Canadian investment climate capital markets CVCA debt capital exit strategy global investment climate private equity survey venture capital