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European Buyout Firms Looking for Big 2014

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December 21, 2013

2013 has been the best year for fundraising since the global financial crisis for European private equity (PE) funds that are focussed primarily on buyouts. According to PENews.com, the biggest firms in this sector are gearing up to target another record year in 2014.

 
Based on data from Preqin, total funds raised in 2013 by buyout focussed funds stand at €43billion, against €26.9billion in 2012, an increase of 60%. It is also worth noting that the number of funds actively fundraising also increased this year, from 32 to 40. This represents a 25% increase, indicating that while these returning funds brought funds to the marketplace they were supplemented by increased fundraising activity by those that were already looking for investors.

 

Tatiana Chopova of leading asset manager AlpInvest told PENews, “In Europe we have certainly seen the fundraising recovery in 2013, and for 2014 I expect a gradual recovery in investing and fundraising. “Public valuations have increased significantly, implying that many investors have become underexposed to private equity relative to their targets.

 

There were also a lot of exits this year which dwarfed new investments, again amplifying the denominator effect. Europe is also showing clear signs of stabilisation, meaning that investors are becoming less risk-averse, and you see that also from investors outside Europe, who are becoming interested in Europe again.”

 

It is estimated that €20billion will be raised in the early part of 2014 alone, with firms including AlpInvest, Bain Capital, and Altor continuing their fundraising although being more aggressive in their approach, while it is also believed more funds will emerge from Southern Europe, taking the total number of buyout related fundraisers in excess of 50.The largest individual funds are expected to target sums in excess of €3billion, while smaller firms are likely to work together and raise sums of around €500million between them.

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