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March 14, 2007
Another VC Bites the Dust
Apax Partners has decided to drop out of the venture business in favor of the "more stable" returns from buyout investments:Apax Partners Worldwide LLP Chief Executive Officer Martin Halusa plans to stop investing in startup companies to focus solely on leveraged buyouts after raising a record 10 billion-euro ($13 billion) takeover fund.
"Our next fund will be 100 percent buyouts,'' Halusa said last week after giving a presentation to the Washington State Investment Board in Olympia. "Our venture results have been very volatile, and our focus is on the more stable end of the business.''
A continuing run of VC dropouts will do wonders for the "stability" of returns in venture, not to mention steadily driving buyout returns to the S&P 500.
[via Bloomberg]
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And in a "circle-of-life" kinda way, the buyout firms will reduce the supply of equities, paving the way for more IPOs (as per your prediction), which will make the market more attractive for VCs once again... someday.