The latest CEPRES Private Capital Market Outlook highlights how the venture capital industry and its underlying technology and innovation across many verticals such as financial services, entertainment, social media and healthcare can stand to benefit from the consequences of the pandemic.
Analyzing mean US venture capital gross IRR’s on the CEPRES Platform across deal investment years 2003 through 2019 show outperformance of the Financial Services sector at nearly 28% gross IRR, followed by Pharma/Biotech at 19%. Furthermore, US venture capital investment volume during Q3-2020 increased by more than 20% Quarter-on-Quarter and Year-on-Year, making the third quarter the second-best quarter, as measured by investment activity, since before 2007.
A CEPRES report published early this year, “Latest data shows how digital transformation in many industries drives growth in PE Investments”* shows that the financial services sector achieved high valuation levels and enterprise value growth as a result of embedded digital strategies. CEPRES expects innovation to continue to bring even more efficiency and margin improvement to financial services.
Source: CEPRES Platform Copyright © 2020 CEPRES GmbH
All analysis is generated from investment and portfolio due diligence conducted on the CEPRES Platform by investment counterparties, based on actual transactions. More information and further detailed analysis is available to CEPRES clients and upon request.
Commentary:
“Despite the downside risks posed by COVID-19 and its second or third waves that are resulting in more partial lockdowns, investors’ market sentiment remains strong as indicated by the performance of major indices. With significant amounts of dry powder in the market and GPs ready to make deals, we strongly recommend that investors and fund managers alike always perform thorough analysis and due diligence to substantiate and optimize investment decisions. CEPRES, through its integrated platform and market intelligence, provides its clients with the capability to perform such diligence.”
Dr. Daniel Schmidt, Founder & CEO, CEPRES.
