Venture capitalists optimistic but cut back: survey

SAN FRANCISCO (Reuters) - A majority of venture capitalists are cutting back on the number of investments they have but many remain optimistic in the long term, an industry group reported.

The National Venture Capital Association, working with Deloitte Touche Tohmatsu, said that 51 percent of 725 venture capitalists surveyed are decreasing the number of companies they plan to invest in. By contrast, only 13 percent are making an increase.

At the same time, many remained optimistic about the future. More than half said that now is a good time to invest in new companies, and nearly half said they believed their future investments would be larger than now.

"Going around the country, I hear venture capitalists, by and large, think we have hit bottom and will be making our way out of this this year," said Mark Heesen, president of the National Venture Capital Association. He spoke in a telephone interview with reporters.

The survey of venture capitalists from around the globe found that many of those surveyed are looking to increase investments in what they see as growth fields.

Six in 10 plan to increase their investments in clean technology over the next three years and more than one-third plan to increase their investments in medical devices.

About one in four will increase their investments in new media, consumer business and bio pharma. About one in five will increase investment in software.

The survey also confirmed venture capitalists have backed away from new start-ups during the recession.

"Thirty-six percent of the respondents surveyed intend to move toward later stage investing" to support their existing companies, the survey found.

Of those surveyed, 44 percent were from the United States, 16 percent from Asia Pacific countries, 21 percent from continental Europe, 10 percent from the Americas outside the United States, two percent from Israel and seven percent from Britain.

More than one-third were from firms with between $100 million and $499 million under management.

(Reporting by David Lawsky; Editing by Phil Berlowitz)