European investors think globally, act localy

Contact: Sonja Ludvig
Deloitte in Bosnia and Herzegovina
Corporate communications senior coordinator
+ 385 1 2351 900

Up to two-thirds of  European venture capitalists rather invest in Europen regions than in Asian and American states. The preferred region for almost three quarters of European investments is Central and East Europe, according to the “ Global trends in venture capital 2007 survey”, a global report by Deloitte and EVCA (European Private Equity and Venture Capital Association). ¹

Almost half (48 percent) of European venture capitalists developed strategic alliances with foreign-based firms. “European venture capitalists are very active in the foreign investments, but unlike their counterparts in Asia and America, they do not focus their investments to China and India. Higher quality deal flow, positive entrepreneurial environment and lower risk keep the European venture capitalists closer to their home. Besides, physical proximity to the investment portfolio enables the more effective cooperation with local management. European venture capitalists are mainly focused on the local investments, including those which can potentially create opportunities on the global market”, explains Vladimir Milošević, partner in Financial advisory services in Deloitte. “Familiarity with local business cultures improves the success of investments.” One of the toughest issues globally is intellectual property protection. China is, by far, the most frequently cited country in which venture capitalists identify financial risk, and they indentify this country as having IP laws that create additional financial risk. “On the other hand, international venture capitalists consider European countries to be the area of low risk”, adds Milošević.

Among European respondents, 86 percent acknowledged that at least some part of their portfolio has significant operations - manufacturing, research and development, engineering, and back office - outside the headquarter country. As can be expected, China is still the first choice for manufacturing operations (19 percent). However, Central and East Europe are popular choice for establishing manufacturing operations as well (17 percent). This European region is the first choice for engineering (14 percent) and – with India – establishing the back office operations (10 percent). Although the venture capitalists are very careful, even conservative, when it comes to new investments, it can be concluded that the percentage of new investments is rising slowly. European venture capitalists are capable to face the challenges that come with the globalisation, particularly thanks to their international business experience developed in Europe, a continent of many different business cultures. 
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1 This global research was conducted in association with several venture capital associations. The survey is based on 528 responses from general partners of venture capital firms. Of the 528 total respondents, 31% were based in Europe.

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The International Association of Airline Internal Auditors (IAAIA) began in 1991 with several airline internal auditors gathering in London to exchange information on challenges and best practices experienced within their Internal Audit departments. As of 2006, the organization has grown to over 70 member airlines and continues to meet annually across the world to network, exchange ideas and solutions.

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