Novestra, the listed Swedish venture capital firm, has written down the value of its private equity portfolio by SKr154m (E16.7m), or 45 per cent, over the course of 2002. The firm currently values its portfolio at SKr170m.
Novestra cited falling public market valuations and a number of portfolio companies not performing according to plan, as the principal reasons for the adjustment.
Peter Ekelund, managing director of Novestra, believes that the firm made a conservative judgement on the write-downs. “I don’t think we need to go any further. I believe we will be able to make profits this year and going forward.”
“As the general market became so much lower, it became absolutely necessary to focus our operations on a limited number of holdings”, explained Ekelund.
Commenting on future investments, he said: “The number one priority is concentrate on our existing companies. But, if we can find companies of similar quality then I think it will be interesting to add one or two companies to the portfolio over the next twelve to eighteen months.”
The firm also said it had completed the restructuring and consolidation phase of its investment portfolio, which it had worked on in the past year. The firm sold three portfolio companies, including Comintell and Powernet, back to management for nominal amounts. One firm, 34 Networks, is currently undergoing voluntary liquidation.
After the consolidation, portfolio primarily consists of companies in the post-venture phase, Novestra said in a statement. Explorica, myPublisher, Netsurvey, Qbranch, DCM, B2 Bredband, Bibit Billing Services and Speedera Networks have all shown a strong growth in revenue, the company said.