Survey highlights new optimism among VCs

A report carried out by Deloitte & Touche says over 90 per cent of VCs expect performance of their investee companies to remain the same or even improve.

The Private Equity Confidence Survey (PECS), Deloitte & Touche’s quarterly report focusing on the private equity market, has reported the first significant upturn in VC confidence in the economy for almost three years.

The report suggests that over 90 per cent of VCs expect performance of their investee companies to improve or remain the same, compared with under half (42 per cent) of last quarter's respondents.

72 per cent of those questioned believed the economy will improve or remain the same. The previous PECS report revealed that over 80 per cent of VCs thought the economy would deteriorate further.

The report suggests that optimism pervades all sectors of investment, with venture capitalists expecting improvements in the performance of investee companies, deal activity and funding availability.

Quintin Barry, Deloitte & Touche private equity partner said, 'VCs appear to have called the bottom of the market. The consensus that investee company performance will improve means that VCs should have greater confidence of future earnings and increased appetite to see off competition from trade buyers who generally remain weak.”

The quarterly survey, carried out by Deloitte & Touche's Corporate Finance network, gauges the expectations for the private equity market over the next six months of over 770 mostly-UK venture capitalists.