German VCs beat US-based colleagues in average gross return since 1998, according to the Centre of Private Equity Research: Germany with an average return of 11% p.a., the US with 8%.
This came to my attention c/o RealDeals, a European publisher serving the local PE community. Their journalists spoke to a few of the top German venture capital firms in this regard. The German VCs believe the extra return they achieved was due to, in relative terms, the smaller number of firms and lower amount of venture capital available in German. The VC market is so small compared to the size of the local economy, they can do more cherry picking than their American colleagues.
Despite being the largest European economy, the VC community in Germany languishes behind the UK and France. Speaking of France, the French VC have the contrary problem. Recently, I spoke with a renowned French investor who lamented about the inflated valuations in France for venture investments, thanks to the local over supply of such funding.