Contact: Jane Kneebone
Deloitte
Communications and Media Manager
0416 148 845

Contact: Paula Capaldo
Deloitte
Partner, Growth Solutions
(08) 8407 7136

Deloitte, the professional services firm, has announced findings of an extensive survey into the venture capital industry and globalisation. A key component within the survey is the globalisation plans across the industry. More than half of venture Capitalists (VCs) surveyed said they would expand their investment focus internationally within the next five years. This contrasts with the previous traditional perception that VCs look to invest in local technology developments.

Paula Capaldo, Deloitte Growth Solutions partner said, "There are a number of key factors which have inspired VCs to look beyond their back yards. In Europe, VCs are looking to Asia and Central Europe as lower cost locations and Western Europe for access to quality entrepreneurs and portfolio diversification. The Asia Pacific region is also looking within its own region to access lower costs, with almost 70% pointing to China and the remainder to India. The popularity of China and India as low cost locations is also mimicked by US VCs. Aside from China and India, the overall findings show that the majority of VCs are taking their first international steps within their own regions."

The survey also showed that VCs around the world have a similar approach to international growth.

"The survey shows that there will be a growing international interdependence in the VC market, with VCs forming strategic alliances and informal networks around the world. The reasoning behind this is borne out of separate findings which show that the largest perceived barrier to international growth is a lack of local knowledge or expertise. This response tallies with the key finding that 70% of respondents believe strategic alliances will be a key method for globalisation," added Ms Capaldo.

Instead of setting up offices in foreign markets, most VCs are looking to expand through networking opportunities that involves a heavy reliance on established local players.

In Australia there has been a strong growth in funds committed to venture capital investments with an increase of 25% between June 2004 and June 2005. Most of these funds have been sourced domestically.

*  Please see attached below full media release and Deloitte study.