The Republic came 14th out of 21 European countries in a survey of private equity investment in 2001.
The survey, by the European Private Equity & Venture Capital Association (EVCA), found the Republic invested 0.126 per cent of GDP in private equity in 2001. This compared to a European average of 0.253 per cent.
Sweden came first in the survey (0.873 per cent), with the UK second (0.646 per cent) and the Netherlands third (0.439 per cent).
In terms of funds raised, the Republic came 13th, with €210 million, a rise of 6.4 per cent on 2000. In terms of funds invested, the figure dropped 35 per cent, to €145 million. The number of investments in the Republic also fell in 2001 when compared with 2000 (down 10 per cent, to 184).
The association said the long-term growth rate for the Republic followed an upward trend with funds invested in 2001 being 38 per cent up on the 1999 figure.
"The private equity and venture capital industry in Ireland has grown dramatically over the last number of years from €20 million investment in 1997, to €105 million in 1999, to a high of €223 million in 2000."
The drop in investment in the Republic in 2001 followed the general European trend though it was slightly more marked.
The total invested in the countries surveyed was €24.3 billion, down 31 per cent on the 2000 figure. The association said there was a sharp drop in the involvement of corporate investors in the private equity field in 2001. The share of funds raised from corporate investors fell from 11 to 2 per cent. Pension funds re-entered the market, investing 76 per cent more in 2001 than in 2000.
"It is likely that the pattern of high-tech investing will continue in Ireland as private equity funds indicated that more than 80 per cent of their new funds raised in 2001 were intended for high-tech investments. However, within the high-tech area, there have been shifts in where the money is being invested with a marked reduction in the amount invested in the communications area. The majority of investments in 2001 were in the computer-related area," the association said.
