The Performance of Publicly Traded European Venture Capital Companies

Sophie Manigart, Peter Joos and Donaat De Vos
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Peter Joos: University of Ghent
Donaat De Vos: Stanford University and University of Ghent

Journal of Entrepreneurial Finance, 1994, vol. 3, issue 2, 111-125

Abstract: The stock market return and the risk of 33 quoted European venture capital companies during the period 1977-1991 are studied. The return is negative on average with eight of the 33 companies having a return that is higher than the market return. However, the systematic risk (measured by the beta of the stock) is lower than the market risk. When taking the risk into account, no company has a return that is significantly higher than zero, but four companies have a return that is significantly lower than zero. When interpreting these results, one has to take into account that most shares of venture capital companies trade at a significant discount relative to their net asset value, indicating that the long-term return that investors can expect in the future, may be higher than in the past. Venture capital companies that are specialized in a specific investment stage have a higher return, while the regional companies have a lower return than general companies. The systematic risk of specialized companies is higher than that of general companies.

Keywords: Capital; Venture Capital; Publicly traded; Europe (search for similar items in EconPapers)
JEL-codes: G12 G24 G32 (search for similar items in EconPapers)
Date: 1994
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Citations: View citations in EconPapers (9)

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