Setter Capital, the Toronto based secondaries advisor, has put together a comprehensive list of the most popular buyout funds in Europe within the secondaries market, listing the 40 most popular funds in this sector.
This overview was originally reported by the Financial News website. Setter used a sister platform, https://www.secondarylink.com, which it launched in late 2013 for use by fund managers, as well as investors and intermediaries, to monitor the market and accumulate the data needed to put together the list.
Secondary Link ranks the popularity of funds based on a number of different factors, which include liquidity, saleability, and popularity. The basis for ranking is how many of Secondary Link’s members, of which there are 2,100, follow the funds through the website.
The most popular and best performing fund in Europe was from CVC Capital Partners. Financial News reported that the California Public Employees Retirement System (calPERS) had noted that CVC Capital’s third fund in Europe had returned almost triple its investors money.
Setter’s research also indicated that Altor Private Equity Partners, the Nordic firm headquartered in Stockholm and often cited by industry data source Preqin as one of the better buyout funds in Europe, were popular.
Financial News reported that most of the funds ranked as most popular by Setter were pan-European funds. Given the reach of the modern private equity industry and the way in which many firms are looking for a local presence in areas where they have interests or are planning to target, this is unsurprising. However, a number of smaller, local and country specific funds can be searched within the Secondary Link platform, and some of these have proven to be the most sought after by investors.
These funds include those managed by London headquartered Graphite Capital, who prominently invest in London businesses but also across the rest of the UK, and by Chequers Capital, who are based in Paris. Peter McGrath, of Setter Capital, told Financial News that the private equity firms that were managing the larger funds had a better chance of achieving a higher rating, as these tended to be the funds that were already popular and held a presence within the industry, as well as having a reputation for delivering high returns to investors. This would certainly have been the case with CVC Capital Partners.
Notably, firms focused Southern Europe did not perform well, with only Investindustrial, who themselves are more prominent in Central Europe anyway appearing on the list. This is perhaps a sign that investor confidence in Southern Europe remains low following the financial crisis, and funds based here as well as businesses in general face a challenge to restore this.
Confidence is only likely to return when funds start to see returns from the region, but for this to happen they need to find investors from somewhere. Pinal Nicum, of Adams Street Partners, told Financial News, “This list is essentially a ‘who’s who’ of European private equity – high quality managers which one would expect to be attractive to many secondary buyers.
“The list is certainly not exhaustive; there are other quality assets which are perhaps less visible to the market and where access can be more of a challenge.”