GIMV writes down portfolio by E290m

The Belgian venture capital firm has written down its portfolio to E820m as it looks to concentrate on exits going forward.

The Investment Company for Flanders (GIMV), one of Belgium’s leading providers of venture capital, has published its results for 2002, announcing a write-down on its portfolio of nearly E300m.


GIMV, set up in association with the Belgian government in 1980 and listed on Euronext in 1997, said the valuation of its portfolio had been reduced to E820m, compared with E1.18bn at the end of 2001.


The firm, which invests in ICT (information and communication technology), life sciences and growth capital opportunities, reported an accounting loss of E300m, with write-downs accounting for E290m. 75 per cent of the reductions, made in line with the firm’s valuation policy to reflect performance trends in the public markets, took place during the first half of the year.


The most drastic change to have an impact on the value of GIMV’s portfolio was a E91m downward correction of the valuation of Belgian internet business Telenet.


Last year GIMV invested a total amount of E159m, of which almost 70 per cent went into existing portfolio companies such as Telenet, which received E30m in follow-up funding. 30 per cent of the total was invested in Belgium, with the remainder overseas.


The ICT team invested E53m, inclusive of the E30m for Telenet. The life sciences unit invested E42m. The remaining E63m was deployed through GIMV’s corporate investment unit in expansion capital opportunities in Belgium, Germany and the Netherlands. In terms of net asset value of the GIMV portfolio, 26 per cent is in ICT investments, 19 per cent in life sciences and 55 per cent in its corporate investment business.


Ongoing pessimism in the European venture capital market has impacted on the GIMV share price. The company is currently trading at a 54 per cent discount to net asset value, with shares in the business currently trading at E16.30.


In a statement, the firm said that its investment policy in 2003 would be focused on maximising the number of divestments it could achieve, adding that the ‘spread of its portfolio and the ongoing search for exit opportunities give GIMV sufficient confidence that exit volumes will increase in 2003.’