Ireland falls in investment ratings

IRELAND is no longer one of the most attractive locations worldwide for investment as economic recovery takes longer than other locations.

Research from Ernst & Young showed Ireland dropped five places and out of the top 20 list of the most attractive global countries for venture capital (VC) and private equity (PE) investment. Its position has fallen from 16 in 2006 to 21 of 66 countries.

The Global Venture Capital and Private Equity Country Attractiveness Index said Ireland is viewed as a less attractive location because of its poor access to credit, the low risk appetite for investors and predominance in Ireland of sectors which VC/PE community find less attractive such as retail, leisure and construction.

The report also said there are a number of threats to Irish recovery in terms of its attractiveness internationally including the effects of the Irish recession in comparison to other countries, the increase in company failures and the fall off in volume of mergers and acquisitions.

It does, however, say that there are opportunities for Ireland to recover lost ground in terms of its attractiveness to the international investor community.

Government’s commitment to focus on high potential businesses such as new green technologies, a highly attractive medical device and pharmaceutical industry as well as a drop in valuations are all cited as opportunities for Ireland to improve its international profile as an attractive investment location.

Transactions director at Ernst & Young, John O’Halloran said: “Today’s top 10 list are all countries perceived internationally on the road to economic recovery.

“For example, Australia would not have a strong history as an attractive location for this type of investment however; its relative stability in the international turmoil has attracted many risk averse investors.”

The index is based on six key criteria that investors say are most important to them. These are economic activity, the depth of capital markets, taxation, investor protection and corporate governance, the human and social environment and entrepreneurial culture and opportunities.

The United States came out first in the ranking due to its common law legal system. The study also showed that China, Poland and India have taken major strides over the last five years in boosting their appeal to investors.

Among those countries that have slid in investor attractiveness in recent years are Kuwait, Latvia and Oman.

Locations

* 1. United States.

* 2. Canada.

* 3. Britain.

* 4. Australia.

* 5. Hong Kong.

* 6. Singapore.

* 7. Japan.

* 8. Switzerland.

* 9. Netherlands.

* 10. Germany.

* 21. Ireland.