IESE-风险投资和私募股权国家吸引力指数2018（英文）-2018.12-44页

2018 Venture Capital and Private Equity Country Attractiveness Index Summary

Core Content

The Venture Capital and Private Equity Country Attractiveness Index (2018) is a composite measure that evaluates the attractiveness of 125 countries for institutional investors in the VC and PE asset classes. It aggregates socio-economic and institutional data to provide a broad overview of the investment environment, helping investors make informed allocation decisions.

The index is designed to reflect the key drivers that influence the development of VC and PE markets. These drivers include:

• Economic Activity
• Depth of Capital Market
• Taxation
• Investor Protection and Corporate Governance
• Human and Social Environment
• Entrepreneurial Culture and Deal Opportunities

The research team, comprising Alexander Groh, Heinrich Liechtenstein, Karsten Lieser, and Markus Biesinger, along with research assistants Arnau Gil and Florian Linz, developed the index by reviewing academic literature and collecting data over several years to validate and improve the understanding of the factors driving international VC and PE activity.

Main Views

• Economic Activity is a crucial determinant of VC and PE attractiveness. It includes GDP growth, employment levels, and the size of the economy, which influence deal flow and investment opportunities.
• Depth of Capital Market is essential for exit strategies and deal-making. Well-developed stock markets, M&A activity, and liquidity are indicators of a robust financial infrastructure that supports VC and PE investments.
• Taxation affects the attractiveness of a country, particularly for start-ups. The spread between personal and corporate tax rates can incentivize entrepreneurship, but the index focuses on tax regimes with low administrative burdens.
• Investor Protection and Corporate Governance are vital for ensuring legal security and efficient deal-making. Strong legal systems and effective enforcement of property rights are linked to higher VC and PE activity.
• Human and Social Environment includes labor market flexibility, education, and cultural attitudes towards innovation. These factors influence the ability of entrepreneurs to create and scale businesses.
• Entrepreneurial Culture and Deal Opportunities are closely related to the innovation capacity and research output of a country. The number of patents and R&D expenditure are indicators of potential investment opportunities.

Key Information

• The index is dynamic, allowing for the substitution of data series and the addition of new ones to reflect the most relevant and recent information.
• It is not a substitute for in-depth due diligence by investors, but rather a tool to facilitate the process.
• The index is used by both investors and politicians, helping investors assess markets and allowing governments to benchmark and improve their investment environments.
• The index is based on a top-down approach, evaluating countries with respect to socio-economic criteria rather than individual fund management teams.
• The construction of the index involves a multi-level assessment of the six key drivers, using observable data and proxies to represent unobservable factors.
• Exhibit 1 illustrates the structure of the index, showing how each key driver is broken down into sub-categories, some of which are further decomposed into latent constructs.

Limitations and Considerations

• While the index captures broad trends, it cannot account for valuation levels, individual fund performance, or personal judgment, which are not quantifiable.
• Emerging markets are tracked to monitor their development, as they may not yet be mature enough to support VC and PE activities.
• The interactions between the key drivers are complex and not fully understood, requiring a holistic approach to assessment.
• The index is not static, and future editions may refine the data and structure based on new research and data availability.

Conclusion

The 2018 VC and PE Country Attractiveness Index serves as a valuable tool for institutional investors and policymakers to understand and improve the investment environment in different countries. By focusing on the six key drivers, the index provides a comprehensive yet flexible framework for assessing the potential of VC and PE markets globally. It underscores the importance of a supportive legal, financial, and socio-economic environment in fostering innovation and attracting international risk capital.