Buyout funds dominate subdued fundraising

Buyout and generalist funds accounted for 85 per cent of all European fundraising in 2002 as the annual total fell by over a third.

A year dominated by a sense of caution among institutional investors saw European private equity fundraising fall by over a third in 2002, according to a new report.

 

The European Fundraising Review 2003, published by Initiative Europe in association with Campbell Lutyens, the placement agent and corporate finance boutique, reports that E24bn was raised for investment in Europe in 2002, a fall of 37 per cent on 2001 and 42 per cent fall on the 2000 figure.

 

The bulk of the capital raised during the year went to the major European buyout houses, including Cinven (E4.4bn), Candover (E2.7bn), PAI (E1.8bn) and Bridgepoint Capital (E2.03bn). Buyout and generalist funds held up during the year, accounting for E20.4bn or 85 per cent of the total funds raised, with the average buyout fund increasing to E650m.

 

France is once again highlighted as a burgeoning private equity market, accounting for 15 per cent of all European fundraising, led by PAI Management, which closed the largest fund ever raised by a French firm.

 

“Those investors that have continued to commit to the private equity asset class have, in the main, opted for the relative safety and security of the buyout market,” said Nicholas Gordon, head of research at Initiative Europe. “Established groups, able to point to a consistent track record, have performed well in the current climate and many such ‘brand name’ managers have managed to close over target.”

 

The increasingly pivotal role of buyout funds in the asset class, coupled with a lengthy period of decline in the technology sector, have resulted in a third successive decline for venture capital fundraising. Venture fundraising accounted for nine per cent or E2.16bn of the total, a fifth down on the previous year.