How Carlyle Europe V stacks up against funds in the region

The private equity giant has amassed €6.4bn for Carlyle Europe Partners V, almost €1bn more than its original target.

Carlyle Group has gathered €6.4 billion for its largest ever fund dedicated to Europe, surpassing its target by nearly €1 billion.

The private equity heavyweight began raising capital for Carlyle Europe Partners V in November and received commitments from over 300 investors across 27 countries, according to a statement. Fund V is more than 70 percent larger than its 2014-vintage, €3.75 billion predecessor.

The fund had a €5.5 billion target, according to PEI data.

Carlyle’s haul is the second-largest Europe-focused raised so far this year. Cinven raised €10 billion in May for its seventh vehicle.

Early this month, London-headquartered Permira collected €11 billion for its seventh fund, which has a mandate to invest globally across technology, consumer, financial services, healthcare, industrial tech and services.

Fundraising for the region this year has been slower than the previous year, according to PEI’s Q3 2019 Fundraising Report, with $33.6 billion raised in the year to September against $50 billion in the equivalent period last year.

Industry participants PEI spoke to cited political uncertainty around Brexit, growing nationalist policies across the region and slowing growth across sectors as key factors behind investors’ decreasing appetite for Europe.

Still, mega-funds as well as sector-specific and growth equity-focused vehicles have either launched or held final closes this year. These include Permira’s debut growth fund, which reportedly raised €1.7 billion against a $2 billion target in June and Carlyle’s fourth Europe technology fund, which raised €1.35 billion in February.

For Carlyle Europe V, Canada Pension Plan Investment Board and the California State Teachers’ Retirement System committed €300 million and $175 million, respectively, according to PEI data. Brederode invested €20 million and Toronto-based family office Dancap Private Equity committed €10 million.

Capital raised for Fund V will follow the same strategy as its predecessor, investing in upper mid-market opportunities in Europe across a range of sectors. Five investments have already been made from Fund V including in Italian manufacturing company Forgital and Spanish energy company Cepsa.

The firm’s €3.75 billion Fund IV delivered a net internal rate of return of 8 percent and 1.3x multiple as of 30 June, according to a September Carlyle investor presentation.