Feeds

IT holds up well in private equity slump

Chasing the rainbow

  • alert
  • submit to reddit

Boost IT visibility and business value

Global private equity investment for last year fell by almost 50 per cent from the all-time record high of US$199 billion in 2000 to US$100 billion in 2001, according to a study by investment house 3i and consultants PricewaterhouseCoopers published today.

The difficult equity and mergers and acquisition markets, low business confidence and the events of September 11 have all caused investors to become more shy of backing businesses but the survey revealed that technology investments held up better than might be expected. Despite frequent, and deserved, criticisms of over-hype in certain technology markets in 2000, IT is still - generally - seen as a solid investment proposition.

In 2001, technology investments totalled at least $53 billion or 53 per cent of the total. This is down slightly from their 55 per cent share in 2000 but significantly greater than their 40 per cent share ($61 billion) in 1999.

For sure this is a significant decrease, but hardly amounts to a meltdown.

In the survey, 3i/PwC attribute the decline (such as it is) to the "dot.com and internet debacle", reduced spending on IT by many corporations and poor revenues and earnings from technology conglomerates. Delays in third-generation wireless applications coming on stream and the current lack of exit routes, were also factors in this fall from grace.

Developments in technology continue and require financing.

According to the study, technology continues to offer opportunities in such areas as the mobile internet, where Europe has a lead over the USA, encryption and security software, nanotechnology and biotechnology, albeit at reduced valuations and expanded investment timeframes. These are areas 3i itself is investing in, cynics might want to note.

Taking into account private equity and venture capital investment there's at least $180 billion of funds available, 3i/PwC's Third Annual Global Private Equity And Venture Capital report concludes.

According to the study, the top ten countries for technology investment in 2001 were:

  • USA - $30.0 billion (VC only)
  • Canada - $2.9 billion
  • UK - $2.4 billion
  • Germany - $1.6 billion
  • China - $1.6 billion
  • Israel - $1.5 billion (VC only)
  • France - $1.1 billion
  • Hong Kong - $1.0 billion
  • Italy - $0.9 billion
  • India - $0.9 billion

Technology investments in Western Europe totalled $8.3 billion in 2001, down 38 per cent from 2000 levels. The UK led technology investments by amount and Germany led in terms of number of deals.



Altogether, 38 per cent of total investments in Western Europe were made in the technology sectors. Computer software was the largest individual category within technology, accounting for a third of investments in terms of both number and amount. ®

The Power of One Brief: Top reasons to choose HP BladeSystem

More from The Register

next story
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.