Creating lasting value: annual report 2011/12 · · 2015-09-30Creating lasting value: annual report 2011/12. EVCA ANNUAL REPORT 2011/12 | 1 Taking the lead in ... (LPs) have responded

EVCA ANNUAL REPORT 2011/12 | 1

Creating lasting value: annual report 2011/12

EVCA ANNUAL REPORT 2011/12 | 1

Taking the lead in challenging times

The challenges are hard to ignore, but let’s take an honest look at where we are today. Europe is introducing financial regulation to make sure that a crash like that of 2008 can never happen again. There is no doubt that the capital adequacy rules imposed on financial institutions have rapidly restricted the flow of capital in the economy.

Meanwhile, private equity and venture capital is carving out a leading role at the heart of Europe’s growth agenda. We know that our portfolio companies tend to grow faster than their counterparts. This positions our industry as a critical link between institutional capital, on the one hand, and innovation and enterprise in the private economy, on the other.

And our investors renewed their commitment to us in 2011. Funds raised grew by 80% from 2010, demonstrating that, despite today’s uncertainties, private equity and venture capital remain favoured investments for those seeking superior long-term returns.

As an industry, we have moved from the periphery of the investment world to a position right at its core, as evidenced by the central role that we play in Europe’s policy for spurring growth among SMEs. We have got better at demonstrating our values of responsibility and accountability to our stakeholders.

Crucially, we stand united as an industry. I am delighted that many of our funds’ Limited Partners (LPs) have responded to our call to play a bigger role in telling the story of private equity and venture capital, and shaping regulation and governance rules. Our LP outreach events, in Europe and Japan, were a great demonstration of this commitment.

Looking to the future, one thing is certain: we will see many more changes to our industry as the impact of market and regulatory changes crystallises. We welcome this. We are well placed to play a valuable role in the future of the European economy. We are looking forward to tackling that challenge head on.

In closing, I extend my heartfelt appreciation to the executive team at the EVCA, led by Secretary General Dörte Höppner, who has worked tirelessly in support of our objectives in 2011.

Karsten LangerChairman

2011 turned out to be the year in which Europe’s economic recovery did not quite go to plan. After a good start, Europe became embroiled mid-year in a perfect storm of adverse conditions, including the sovereign debt crisis, that has raised questions about the credibility of its political and economic leadership and led to a renewed slowdown and deterioration of the investment climate.

CREATING LASTING VALUE2 | EVCA ANNUAL REPORT 2011/12 | 3

A persuasive voice for the whole industry

There is no doubt that regulation is essential, and we welcome the drive to strengthen the health of the financial markets. However, we firmly believe that the key to success lies in proportionate and reasonable regulation that encourages – rather than stifles – investment in long-term asset classes like private equity and venture capital. With this in mind, we have been striving to engage with and support the people behind the rules by:

> Helping policymakers grasp the true implications of financial market regulations for our industry

> Encouraging policymakers to develop more appropriate and proportionate regulation wherever possible

> Positioning ourselves as a proactive dialogue partner both for policymakers in Brussels and for the European Commission

> Actively promoting our industry through dynamic, educational communications

We have successfully delivered some landmark developments in our range of in-house communications.

Notably, we submitted the first fully revised draft of the EVCA Handbook of Professional Standards for consultation, positioned as the only industry-wide set of standards to be authored by Limited Partners (LPs) and General Partners (GPs) and endorsed by both. We are also making significant strides towards our goal of developing a single pan-European private equity and venture capital activity database, which will act as the definitive source of accurate, consistent data on our industry.

In 2011, regulation retained the top spot on our political advocacy agenda, driven by the challenges presented by the EU Alternative Investment Fund Managers Directive and new capital adequacy regulations for some of our key investors: pension funds, banks and insurance companies.

Looking ahead, regulation will continue to be matched by LP engagement as top priorities for our organisation. As the voice of the whole industry, we welcome the growing number of LPs to join our ranks and look forward to delivering the same high-quality representation as we give to our GP members every day.

Dörte Höppner Secretary-General

2011 was also a year of high-level staffing changes at the EVCA, led by the appointment of:

> Emma Thorpe – Head of Communications

> Dr Cornelius Mueller – Head of Research

> Ashley Williams – Head of Events

> James Burnham – Head of External Relations

Robust demand for our services means we will continue to selectively strengthen the EVCA team with new hires over the coming year. It has also motivated some positive changes to the way we work at the EVCA, including an association-wide software upgrade and shift to cloud computing.


Political advocacyContributing to smart growth As the ripples of the financial crisis continue to spread through Europe, nations are increasingly realising that economic growth cannot be achieved without one crucial ingredient: long-term investment.

That is where private equity comes in. In the past 12 months, we have seized every possible opportunity to position private equity and venture capital as part of the long-term growth solution for the European economy. These efforts are already paying off, with our work helping the European Commission (EC) to recognise that the Alternative Investment Fund Managers Directive (AIFM Directive) was inappropriate for venture capital. The EC is now close to finalising a voluntary regulation for the venture capital industry which will enable it to benefit from a European ‘marketing passport’.

With the AIFM Directive now at Level 2 in the process, the regulation has been made into law and attention is now turning to its implementation into member state law. This is our cue to shift to a subtly different

approach out of the spotlight, instead dealing directly with the EC and European Securities and Market Association (ESMA) and continuing to work hard behind the scenes to champion the interests of the industry.

And we are adjusting that approach again for the next broad bucket of capital adequacy regulation: Solvency II for insurers, the Capital Requirements Directive IV (CRD IV) for banks and the Institutions for Occupational Retirement Provision (IORP) Directive for pension funds.

Because Solvency II is already established as law and is now at a technical stage, we are focusing our efforts on improving the regulatory treatment of private equity under the new regulations. It is not just about Solvency II; it is also about

paving the way for a more appropriate understanding and appropriate treatment of private equity under any future capital adequacy-based regulations, such as the review of the IORP Directive.

We still have time to influence the outcome of this legislation, but not enough time to rest on our laurels. That is why we have formed a coalition of trade unions, employer associations, asset managers and pension funds to make our voice heard in the Brussels village. Above all, we are making sure we grasp every possible chance to position the private equity industry as a convincing solution to Europe’s growth agenda.

“we have seized every possible opportunity to position private

equity and venture capital as part of the long-term growth solution

for the European economy”


Industry promotionCreating opportunities to connect

Private equity and venture capital is never far from the headlines, but the valuable contribution that our industry makes to Europe’s economies largely happens behind the scenes.

In 2011, we launched a communications initiative designed to boost understanding and awareness of how private equity works in the real economy. When it comes to the benefits, we have a great story to tell. Private equity and venture capital have a critical role to play in:

> supporting innovation

> helping to turn around struggling businesses

> restructuring industries

> providing company finance

> developing best-practice corporate governance structures

As an organisation, we make the most of multiple channels to promote the industry to stakeholders. By mobilising our councillors and committee members, we ensure the industry’s messages are made in a very wide number of public engagements, including:

> policy events

> forums for institutional investors

> trade delegations

> speaking slots at sector conferences and international trade conferences

“When it comes to the benefits, we have a great story to tell”


Industry networkIn good companyAs the largest private equity association in the world, we bring together more than 1,000 investment and advisory members from Europe and beyond. We are not just the biggest association; we are the only one to represent both GPs and LPs equally.

In 2011, nearly 500 GPs and LPs flocked to our Investors’ Forum in Geneva to network with managers, investors and potential LPs. We are committed to keeping the ratio of GPs to LPs at 1:1 to ensure this high-impact event continues to deliver tangible benefits for both sides of the limited partnership.

2011 also marked the successful introduction of two new LP outreach events, designed to introduce institutional investors to the EVCA and explore issues such as regulation and professional standards. Building on the success of the European outreach event, our Chairman Karsten Langer led a December road show where we met with nearly 60 Japanese investors to address concerns over the European economy and to make the case for European private equity and venture capital.

Driven by growing interest in responsible investment (RI), we launched an RI summit where we engaged with around 200 policymakers on the critical issues shaping this agenda.

Looking ahead, our aim is to build a network of the next generation of private equity leaders, with an event for young professionals now under development. In response to high demand for insight on hot topics like professional standards, we are also busy developing a great range of new courses for the EVCA Academy.

“this high-impact event continues to deliver tangible

benefits for both sides of the limited partnership”


Industry excellencePromoting a best-practice culture

As an organisation, we are here to support our members with professional standards and guidelines to codify best practices across the industry. Individual practitioners can also enhance their knowledge of evolving standards and hone their skills through the EVCA Academy training programmes.

the Governing Principles and the Corporate Governance Guidelines together for the first time in one core document. The new, improved version also includes sections on GP communication and transparency, LP conflicts of interest, LP Advisory Committees, key man provisions and secondary transactions.

After consultation, we will seek approval of the final EVCA Handbook by the EVCA’s Board of Directors. The EVCA Handbook will become the only industry wide set of standards governing the relationship between GPs, LPs and portfolio companies to be authored by both limited and general partners and endorsed by all.

“the new Handbook is set to become an indispensable tool for all our members”

Chaired by Vincent Neate of KPMG, our Professional Standards Committee is made up of investment and advisory members and is designed to ensure members:

> stick to our high standards of ethics, conduct, governance and responsible investment

> receive exceptional guidance on putting those standards into practice

The EVCA Handbook of Professional StandardsThe EVCA’s professional standards are not static documents. Instead, they are regularly re-assessed by our Committee to ensure they fit with current best practice. We believe that strong and comprehensive professional standards are critical to

mapping the future of the European private equity and venture capital industry. That is why we are committed to anticipating corporate governance standards before they happen, as well as playing an active role in shaping and implementing them.

Backing up this commitment, 2011 saw us move from a preliminary version to the first fully revised draft of the EVCA Handbook of Professional Standards for member consultation, with all members given two months to review the publication and contact us with any feedback.

Compiled by the EVCA Professional Standards Working Group, the new Handbook is set to become an indispensable tool for all our members, combining the Code of Conduct,


Industry data and research

The EVCA research department focuses on supplying robust industry data to our members and the industry’s stakeholders including journalists, think tanks, the European Commission and the academic community. We respond to a high volume of queries with data requests – around 50 per month – and have worked hard to ensure we respond to EVCA members within 24 hours.

The top three sectors by number of companies in 2011 were life sciences, computer and consumer electronics and communications together accounting for 50% of the total. By amount invested, consumer goods and retail, business and industrial products, life sciences and communication also accounted for 50% of total investments. The stage focus split reveals a sector specificity in the case of venture capital (life sciences, computer and consumer electronics and communications) and a more homogeneous distribution for buyout and growth.

DivestmentsThe amount divested at cost increased by 50% compared to 2010, almost reaching the 2006 peak. This increase was triggered by the buyout and growth segment which accounted for 92% of the total amount. More than 2000 companies were divested of which venture capital and buyout and growth had about an equal share. Over the year, the most favoured exit routes were trade sale and secondary sale, which jointly represented more than 60% of the market in terms of amount divested.

measures of successMeasures of success

8.42

65.26 69.98

11.82 17.05

33.25

3.69

2.461.69

1.68

6.23 3.49 3.17 4.85

6.20

0

10

20

30

40

50

60

70

80

90

2007 2008 2009 2010 2011

Venture capital Buyout funds* Generalist

¤ b

illio

n

*Buyout funds including Growth capital and Mezzanine funds

Source: EVCA / PEREP Analytics

Venture capital Buyout and growth

0 100 200 3000100200300

207

72

97

213

281

59

56

11

31

240

46

32

76

128

133

224

115

40

Trade sale

Public offering

Write-off

Repayment of silent partnerships

Repayment of principal loans

Sale to another PE Firm

Sale to financial institution

Sale to management

Other means

Incremental amounts raised during the year

Divestments – Market statistics – Number of companies by exit route

Pan-European database initiativeIn last year’s report, we announced the launch of our far-reaching European database initiative. As part of a close collaboration with national European private equity and venture capital associations, our aim is to create a single European database to track industry activity.

Industry statisticsFundraisingIn 2011, overall fundraising increased by 80% against 2010 levels, matching the levels seen in 2001. Venture capital contributed to this trend with a 50% increase compared to 2010, while the ¤30 billion buyout segment grew nearly 100%. More than half of the buyout total raised came from pension funds, banks and funds of funds.

InvestmentsInvestments remained stable, with a 6% increase from 2010 bringing levels into line with 2005. Buyout and growth accounted for 91% of the total amount and 38% by number of companies. In 2011, 4,800 companies received private equity investments in Europe, of which SMEs represented 85%, with an average investment per company of ¤3m.

66.0

47.4

19.9

39.2 41.6

6.8

6.2

4.1

3.93.9

1,826 1,931

1,679

3,492

2,016 1,885

3,908

3,279 3,220 3,143

0

10

20

30

40

50

60

70

80

2007 2008 2009 2010 2011

¤ b

illio

n

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Nu

mb

er o

f co

mpa

nie

s fi

nan

ced

Buyout and growth – No. of companies Venture capital – No. of companies

Buyout and growth – Amount Venture capital – Amount

Investments – Industry statistics – Amount and Number of companies

1.2%

0 – 19

20 – 99

100 – 199

200 – 249

250 – 499

500 – 999

1000 – 4999

5000+

42.8%9.0%

4.2%

5.5%2.5%

5.0%

29.9%

Number of employees

Investments by number of employees in 2011Market statistics – % of number of companies financed


PlatformsAll the EVCA’s full members share similar investment and governance models, based on creating lasting value. However, the industry itself mirrors the highly varied nature of the corporate world itself. Our governance model includes industry “platforms” to reflect this variety.

“Our mission is to improve education about the industry among policy

makers and influencers”

Limited Partner PlatformEVCA HandbookIn 2011, The EVCA Handbook of Professional Standards was released for member consultation, with all members given a two-month timeframe to comment. Compiled by the EVCA Professional Standards Working Group, the new Handbook is set to become an indispensable tool for all our members, combining the Code of Conduct, the Governing Principles and the Corporate Governance Guidelines together for the first time in one core document.

Institutions for Occupational Retirement Provision DirectiveWhile we have always welcomed EC proposals to review Europe’s retirement provision under the IORP Directive, we have consistently cautioned that the proposed regulation could drive pension funds away from long-term growth asset classes such as infrastructure and private equity. In response, we called for a comprehensive impact assessment of the full macro-economic implications of the proposed regulation, and will continue to monitor new developments as they happen.

Venture capital PlatformDuring 2011, our dedicated Digital Agenda Taskforce began creating a library of case studies of very successful and high-impact portfolio companies, alongside a forward-

looking case study of the digital sector using economic impact data to highlight its importance for the European economy.

Venture Capital Regulation (EVCFR)At the forefront of the agenda in 2011 was the proposed Venture Capital Regulations (EVCFR). Encouraging progress by the Council and the European Parliament have brought a final text within reach by July 2012. Meanwhile, we continued to stress to decision makers that the EVCFR should include the smaller funds that make such a significant contribution to the financing of Europe’s SMEs. We also argued the case against the depositary obligation and the five-year threshold for qualifying portfolio companies.

Fund-of-Funds proposalMarch 2010 marked the launch of the EVCA’s Fund-of-Funds proposal, alongside the European Investment Fund (EIF). Designed to stimulate demand for high-quality venture funds, the proposal met with a positive response from policy makers, many of whom are backing our proposal for the future equity instruments within the Horizon 2020 and COSME programmes. The objective is to continue working with venture capitalists, fund-of-funds managers and policy makers to define an incentive structure that actively encourages international institutional investors to return to European venture capital.

Venture capital-backed IPO indexBased on positive feedback from an academic study on the long-term performance of venture capital-backed IPOs versus the market, we signed an agreement with Stoxx to launch an investible venture capital-backed IPO index in Q3 2012. We are now working to define the procedures to identify and assess IPOs among stock exchanges, Stoxx and the EVCA. At the same time, we are exploring the idea that other national associations could adopt the index, creating a ‘family’ of venture capital-backed IPO indexes for Europe, North America and Asia.

Mid-market PlatformDuring 2011, we produced a unique, mid-market return attribution study, where 18 firms anonymously submitted data on 332 realised deals to Professor Kaserer – a seasoned private equity academic – at the Technical University of Munich.

The results clearly showed that we make money for our investors through actively improving portfolio companies, with over 65% of the overall return generated by earnings enhancement.

We also revitalised the EVCA Buyout report with the aim of improving understanding of the industry and the role of “Enterprise Capital” in helping to drive sustained European economic growth.

Meanwhile, we also contributed to the new industry guidelines set out in the EVCA Handbook of Professional Standards.

European Private Equity Roundtable Platform (Large Buyout)In 2011, the European Private Equity Roundtable (EPER) helped to influence the final shape of the AIFM Directive (AIFMD) on non-bank lending. Europe’s private equity and venture capital industry has been a constructive and engaged stakeholder in the AIFMD process from the start.

We successfully focused on ensuring appropriate and proportionate rules that do not unnecessarily harm access to finance for companies, while creating a European Single Market for our industry. Engaging in initiatives of this kind is a crucial part of our mission to improve education about the industry among policy makers and influencers.

The EVCA’s sincere thanks go to the EVCA Board, Council and Taskforce members who bring us invaluable expertise, energy and enthusiasm, and give up a great deal of personal time to serve the industry.


The EVCA Board of Directors

Mid-Market Platform Council

Mr Craig Donaldson (HG Capital)

Mr André-Xavier Cooreman (Sofinim NV – treasurer)

Mr Christopher Masek (IK Investment Partners)

Large Buyout Platform Council – Members of European Private Equity Roundtable

Mr Vincenzo Morelli (TPG Capital)

Mr Andrew Joy (Cinven)

Mr Richard Wilson (Apax Partners)

Limited Partners Platform Council

Klaus-Björn Rühne (ATP Private Equity Partners)

Ms Marleen Groen (Greenpark Capital)

Mr John Holloway (European Investment Fund)

> Secretary-General Ms Dörte Höppner (EVCA)

The EVCA Board consists of three members of each platform, plus the EVCA Chairman/woman, treasurer and chairman-elect. The EVCA Board assesses all platform action plans, acts as a conflict check and reviews allocation of resources from within the Secretariat. The Board is also responsible for the EVCA’s long-term strategy and sustainability.

> Chairman Mr Karsten Langer

(Riverside Europe Partners Sprl)

> Chairman-Elect Mr Vincenzo Morelli

(TPG Capital)

> Members Venture Capital Platform Council

Mr Alex Brabers (Gimv)

Mr Hendrik Brandis (Earlybird Venture Capital GmbH & Co. KG)

Ms Anne Glover (Amadeus Capital Partners)


Financial statements 2011



Notes1. Quarterly advance of social charges2. 2012 events accommodation contracts signed in 2011 3. Service fees due for the financing of the Public Affairs Executive (PAE) in 2009 paid during 2011. The provision set up as of 31.12.2009 has been reversed4. Events provisions adjusted according to event risk5. Higher level of suppliers due to contracts for 2012 Events signed in 2011 (cf. note 2)6. Deferred income includes services (The EVCA events & academy) to be delivered in 20127. Accrued charges are a provision related to the move of the EVCA offices

Balance Sheet(in euros)

Assets Actual 2011 Actual 2010

Fixed assets At cost, less depreciation 4 2 , 403 1 9 , 5 29

Current assets Receivables 1 06 ,883 1 8 1 , 7 7 8 Deposits and prepayments 1 50, 469 66, 7 7 9 VAT 1 4 3 , 545 7 5 ,868 Deferred charges 2 50 1 , 3 6 3 4 1 , 2 4 7 Cash at bank 3 ,988, 1 68 4 , 1 3 5 ,99 7 Accrued income 3 0 2 0 0 , 0 0 0

Total current assets 4,790,427 4,70 1 ,668

TOTAl ASSETS 4,832,830 4,72 1 , 1 98

liabilities Actual 2011 Actual 2010

General reserves Opening balance 2 , 7 6 7 ,86 1 1 ,82 4 ,82 5 Attribution of profit/loss 1 9 7 , 294 94 3 ,03 5 Closing balance 2 ,965 , 1 54 2 , 7 6 7 ,860

Provisions 3 0 200,000Provision events risk 4 3 60,000 5 38,000Current liabilities Supplier 2/5 8 7 3 ,629 60 1 , 44 3 Payroll accruals 5 29 , 7 3 9 3 5 3 , 204 Deferred income 6 3 2 ,058 260,690 Accrued income 7 7 2 , 2 50 0

Total current liabilities 1 ,507,675 1 ,2 1 5,337

Notes1. Membership price rise for members above the AIFMD threshold of €500m of “assets under management” 2. Lower level of registrations but net contribution to margin monitored 3. Service related to AIFM Campaign and Communication in level ll phase 4. Actuals 2010 & 2011 numbers include the write-offs of membership fees unpaid (budgeted as a net number in revenue) 5. 2009 overdue credits taken in P/L 2011 6. Events provision reflecting current events risks

Profit & loss (in euros)

Actual 2011 Budget 2011 Actual 2010

Membership 1 5 , 7 9 1 ,884 5 , 3 45 ,000 4 , 83 1 ,969Events & Academy 2 1 , 54 2 , 544 2 ,026 ,9 1 0 1 , 6 1 9 ,8 1 6Publications 1 0, 589 30,000 3 4 ,060Sponsoring 3 30, 7 62 4 3 6 , 500 4 20, 3 5 7Service fees 3 658,800 960,000 1 , 3 2 3 , 500Bank interest & miscellaneous 5 3 , 308 3 5 ,000 48,85 2Other revenue 3 405 ,6 1 7 268,000 1 8 7 , 4 3 7

Total revenue 8,793,503 9, 1 0 1 ,4 1 0 8,465,99 1

Personnel costs 3 , 505 ,609 3 ,83 7 , 1 07 3 , 6 3 6 ,989Professional services 2 , 494 ,6 7 7 2 , 499 ,89 3 2 , 409 ,066Housing costs 407 , 3 3 2 4 1 5 , 500 3 96, 3 2 1Accommodation events 480, 3 92 46 3 ,06 1 4 1 2 , 7 30Travel & representation 485 ,89 3 594 , 1 3 4 3 3 9 ,848Communications 1 64 ,94 1 2 5 1 ,92 3 1 7 4 , 1 96Printing & audio-visuals 2 5 3 , 2 59 5 3 9 , 2 2 1 20 1 , 2 20Various office costs 38 1 ,09 7 3 4 7 ,600 3 70, 38 7Finance costs 2 7 ,82 2 4 7 ,9 7 1 3 5 ,64 3Attribution to provision for events risk 0 80,000 - 2 2 ,000Provisions/other costs 4 6 1 5 , 1 98 2 5 ,000 2 26 , 3 7 5

Total expenses 8,8 1 6,22 1 9, 1 0 1 ,4 1 0 8, 1 80,775

Net operating results - 22,7 1 7 0 285,2 1 6

Old creditors 5 4 2 ,0 1 1 0 386 , 3 58Long-term provisions 6 1 7 8 ,000 0 2 7 1 , 46 1

Exceptional non cash credit entries 220,0 1 1 0 657,8 1 9

NET rESulTS 1 97,294 0 943,035

TOTAl liABiliTiES 4,832,830 4,72 1 , 1 98


Financial Report

Profit & LossThe operating revenues increased by 4% to reach ¤8,793,503 in 2011 against ¤8,465,991 in 2010. Operating expenses amounted to ¤8,816,221 in 2011 against ¤8,180,775 in 2010, increasing by 8% over the period. The 2011 net operating loss before exceptional results amounted to ¤22,717 compared to a net profit of ¤285,216 in 2010. Additionally, due to a change in accounting policy, old creditors for the amount of ¤42,011 have been recorded in profit and loss accounts in 2011. The provision for events risk has been adjusted according to current risks with a reversal of provision of ¤178,000 recorded in profit and loss account. As a consequence, the 2011 net accounting profit including these two exceptional non-cash entries amounts to ¤197,294.

The main year-on-year variances in revenue are explained as follows:

1. Income from membership fees, representing 66% of the EVCA’s revenues, increased by 20% due to a membership fees increase.

2. In 2011, the EVCA devoted resources of ¤658,800 to political advocacy activities during the AIFM Directive process.

3. Events and Academy revenues decreased in 2011 by 31% relative to the budget. Nevertheless, this decrease in registration was offset by lower spending. A working group is in the process of repositioning the education program by partnering with high-quality universities and by introducing accreditation courses in line with the AIFM Directive philosophy. The roll-out is planned for Q1 2013.

4. The 32% decrease in sponsorship revenue is mainly explained by the drop of one main sponsor relative to the initial budget as a result of the change in the commercial strategy.

The 2011 operating costs are better than budget by 3%, notwithstanding inflationary pressure and restructuring costs.

Balance Sheet The balance sheet total amounts to ¤4,832,830. The cash position amounts to ¤3,988,168 as at December 31, 2011 compared to ¤4,135,997 in 2010. Reserves increased from ¤2,767,861 to ¤2,965,154 thanks to the exceptional non-cash profit generated.Provision for event risk has been adjusted according to current risks.

Budget 2012For 2012, the EVCA proposes for 2012 a “balanced budget” taking prudent assumptions regarding membership and attendance on events, while aiming at fulfilling all missions which are key for the association. The EVCA has decided to reintroduce the Symposium event, an important key stakeholder gathering for the private equity and venture capital industry, which explains the projected increase by 13% of Events and Academy revenues. The services fees financing the political advocacy efforts will decrease substantially in 2012 as these services will be mostly internalised.On the cost side, personnel costs and professional services will decrease by 9% and 12%, respectively, due to the rationalisation of the organisation in 2011. Travel, communications and printing costs will increase by 10% to support the Symposium event and the new communication initiatives.The necessary budgets have also been allocated to the four member platform activities, as well as to the Professional Standard Committee and the Tax and Legal Committee within the EVCA. In addition, there are various task forces and working groups managed by the Secretariat. As in 2011, the Board will closely monitor the financial situation throughout the year.


Summary of significant accounting policies

> Fixed assets Fixed assets are stated at cost less

accumulated depreciation. Depreciation is provided over the estimated useful lives of assets using the straight line method.

> Cash or cash equivalent Cash and cash equivalent are carried at

nominal value.

> Receivables Receivables are carried at nominal

value. Provisions are made for all unpaid membership and services fees during the year. All other receivables are written off if they are outstanding for more than one year and no explicit confirmation or certainty about payment is available.

> Provisions Provisions are recognised for probable

outflows or resources to settle probable obligations when a reliable estimate of the amount can be made. In additions to that, the company provides for: “events risk losses” on conferences and trainings : the provision can be used up to the limit of the budgeted net operating margin per cancelled event and funded via setting aside 10% of the realised net operating margin contribution of each profitable event.

> Liabilities Trade payables and payroll liabilities are

carried at nominal value.

> Revenue recognition Revenue is recognised to the extent that it

is probable that the economic benefits will flow to the company and the revenue can be reliably measured. With respect to the rendering of services, revenue is recognised by reference to the stage of completion.



Evolution of income, expenditure and reserves (in millions of euros)

Notes1. 2012 membership fees aligned to 2011 billed membership fees less bad debtors 2. Strategic review of the Academy in 2012 and one new event (Symposium) 3. Services fees for the Public Affairs Executive (PAE) 4. Include in 2011 mainly one off revenues 5. Include write-offs of 2011 receivables

2.96

0 1 2 3 4 5 6 7 8 9 10

Inco

me

Exp

end

iture

Reserves

Actual 2004

Actual 2005

Actual 2006

Actual 2007

Actual 2008

Actual 2009

Actual 2010

Actual 2011

Budget 2012

6.60

6.80

7.21

7.70

8.46

8.79

9.34

9.47

6.68

2.10

2.11

2.14

2.15

1.82

2.77

2.96

2.30

6.79

7.20

8.04

8.18

8.81

7.66

9.33

9.49

7.66

Budget 2012 (in euros)

Budget 2012 Actual 2011

Membership 1 5 , 3 50,000 5 , 7 9 1 ,884Events & Academy 2 1 , 7 80, 1 60 1 , 54 2 , 544 Publications 0 1 0, 589Sponsoring 283 ,000 3 30, 7 62Service fees 3 1 50,000 658,800Bank interest & miscellaneous 30,000 5 3 , 308Other revenue 4 7 3 ,000 405 ,6 1 7

Total revenue 7,666, 1 60 8,793,503

Personnel costs 3 , 1 82 ,000 3 , 505 ,609Professional services 2 , 1 92 , 496 2 , 494 ,6 7 7Housing costs 3 99 , 280 407 , 3 3 2Accommodation events 4 7 7 ,6 30 480, 3 92Travel & representation 5 38,880 485 ,89 3Communications 1 83 , 7 50 1 64 ,94 1Printing & audio-visuals 2 7 8,649 2 5 3 , 2 59Various office costs 3 96 , 4 7 5 38 1 ,09 7Finance costs 1 0,000 2 7 ,82 2Attribution to provision for events risk 0 0Provisions/other costs 5 7 ,000 6 1 5 , 1 98

Total expenses 7,666, 1 60 8,8 1 6,22 1

Net operating results 0 - 22,7 1 7

Old creditors 0 4 2 ,0 1 1Long-term provisions 0 1 7 8 ,000

Exceptional non cash credit entries 0 220,0 1 1

NET rESulTS 0 1 97,294

CREATING LASTING VALUE28 |

Bastion Tower, Place du Champ de Mars 5, B-1050 Brussels, BelgiumT +32 2 715 00 20 F: +32 2 725 07 [email protected] www.evca.eu

About the EVCAThe European Private Equity & Venture Capital Association

The EVCA is the voice of European private equity and venture capital. We promote the interests of our more than 1,300 members, to ensure they can conduct their business effectively. The EVCA engages policymakers and promotes the industry among key stakeholders, includinginstitutional investors, entrepreneurs and employee representatives. The EVCA develops professional standards, research reports and holds professional training and networking events. The EVCA covers the whole range of private equity, from early-stage venture capital to the largest buyouts.

Copyright information

No part of this publication may be reproduced except in accordance with the provisions of the Copyright Act 1968.Copyright enquiries should be directed to EVCA. Tel: +32 2 715 00 20

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Creating lasting value: annual report 2011/12 · · 2015-09-30Creating lasting value: annual report 2011/12. EVCA ANNUAL REPORT 2011/12 | 1 Taking the lead in ... (LPs) have responded