Europe's public markets for bioscience companies may be in the doldrums at the moment, but the European appetite for private investments probably has never been higher. In the past year, there has been an unprecedented rise in the number and size of funds available for investing in European biotech companies, particularly those with a continental flavor, and more are on the way.

In the recent past, European venture capital has tended to focus on management buy-outs (MBOs) and buy-ins, shunning the more risky and, at times, more sophisticated early high-tech ventures. In the 10 years to the end of 1996, the annual returns on investment of 25 percent plus for large MBOs against an average of 7.7 percent a year from early stage funds was a major driver in Europe's high-tech boycott. Better returns from biotech investments in more recent times are changing the market's mood.