PREVIEW-Canadian venture investors assess new volatility

* CVCA annual conference in Ottawa, May 26-28

* Investors review private equity, venture capital models

* Asset allocations top agenda

* Investors eye Europe, market stability

By Pav Jordan

OTTAWA, May 26 (Reuters) - The effect of a fresh bout of market volatility on asset allocation and deal structures will top the agenda this week at a meeting of Canada's largest gathering of private equity investors.

A record number of participants are expected to attend the Canadian Venture Capital and Private Equity Association (CVCA) annual conference in Ottawa, the nation's largest gathering of its kind.

At the top of the list are representatives of Canadian pension funds, which emerged as some of the world's most powerful dealmakers while the world limped out of recession over the past two years .

At a series of round-table discussions, hundreds of investors will explore issues ranging from the government's role in driving innovation to the need to change private equity and venture capital investment models to reflect a new economic reality.

"I think everyone is concerned about the continuing financial crisis, including what's happening in Greece, and the levels of government debt and how this affects us generally," said David Adderley, chair of the CVCA annual conference and a partner with Celtic House Venture Partners in Ottawa.

Celtic House is one of Canada's most active investors in private information and communications technology with C$315 million ($297 million) in assets under management.

"In venture capital, the main topic is going to be fund-raising ... how do we raise our next fund?" he said.

Venture capital, the class of investment that gave birth to such Canadian technologies as the BlackBerry smartphone, slowed even more in the first quarter than it did at the depths of the global financial crisis a year ago.

Private equity investing, which involves funding of more mature investments and either selling them or taking them public, was also hit hard by the crisis.

As new shocks batter markets, funds are finding it increasingly difficult to raise capital.

"There are going to be large discussions about how do we go about improving the environment for raising new capital, both on the venture capital and buyout side, given the economic crisis globally," CVCA President Gregory Smith, also a managing partner with Brookfield Financial (BAMa.TO), said ahead of the event.

Even so, the situation has improved since this time last year, when investors were still trying to assess the impact of the financial and economic downturn.

Since then debt markets have recovered, access to capital has improved and valuations are more readable, or at least they were until the latest financial worries in Europe damped hopes of a clean economic rebound.

After a slow mend for the better part of a year, markets stumbled again in March as debt woes in Greece and other European economies triggered fresh volatility.

The subsequent retreat in equity markets has forced companies to rethink plans for mergers and acquisitions or initial public offerings, favorite "exits" for private equity investments.

The uncertainty could drag on as investors gauge the effectiveness of European austerity measures and the impact on the global economy.

"I think survival will be a major theme of this conference," Jennifer Brooy, vice-president for equity at the federal agency Export Development Canada, said ahead of the conference, where she will moderate a panel on "Innovative Approaches to Emerging Markets".

And, with the CVCA gathering set in the nation's capital, the conference will also look at the role government is playing in supporting private equity and venture capital.

($1=$1.06 Canadian) (Reporting by Pav Jordan in Ottawa; editing by Frank McGurty and Rob Wilson)