EUROPE - The value of funds raised by European private equity funds fell by almost 30% in 2002 blighted by dismal markets with nearly half falling short of targets.
Buy-outs fared better than venture firms, accounting for more than two thirds of total fundraising.
A total of 57 funds held a final close in 2002 with a combined value of E27.4bn, according to private equity research firm AltAssets. The total represents just over half the amount raised in 2000.
Head of research at AltAssets, Chris Davison, said: “Venture firms had a very tough time, as you would imagine from the scale of the downturn in technology markets since the boom years, but the buy-out sector had a much more respectable experience.”
Over three quarters of the funds that closed in 2002 were in the market for over 12 months, suggesting difficulty in securing commitments. However, most mid-market funds reached or exceeded their targets within 12 months.
Most of the funds raised were accounted for by just a handful of firms. Nine mega-funds, funds of more than E1bn, comprised E19.6bn of the total.
Venture funds accounted for 28% of the number of funds raised but only comprised 5% of the year’s value. Some 56% of venture funds closed below their targets, with 80% of funds of funds failing to meet them.
In contrast, heavyweight buy-out firms, such as Cinven, Bridgepoint, Candover, and Barclays all exceeded their initial target sizes to raise mega-funds.
The UK remained Europe’s most active fundraising centre, making up 77% of the total value of funds raised.
“There is no reason to expect much different in 2003. It will be tough but it should not necessarily be any harder than last year. The expectation is that 2002 and 2003 will prove to have been good years for private equity firms to make investments,” added Davison.
“Certainly, healthy deal flow this year would be supportive of fundraising efforts. It would show investors that there is plenty of scope for all the money that has been raised over the last couple of years to be productively deployed.”
The registration deadline for the Workplace Savings & Benefits Awards 2019 is today.
This week's top stories were the DWP giving the green light to CDC and TPR granting extensions for 11 master trust authorisation applications.
Susan Martin says building strong foundations for business are the only way forward as the pensions industry is radically shaken up
The Pensions Regulator (TPR) has granted Now Pensions a six-week extension for its master trust authorisation application after the 31 March deadline, PP can reveal.