Chart of the Week: The decline of European debut managers

Capital raised by first-time European managers has fallen by half since 2009

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Debut managers from Europe have struggled to raise capital in the years after the financial crisis. In 2014, first timers raised exactly half of the total achieved in 2009. Notably, the number of funds closed was almost exactly the same in 2014 as in 2009. Fondi Italiani Per La Infrastrutture, which raised $2.03 billion, was the largest fund to close in 2009.

In 2014 SwanCap Opportunities Fund, a secondaries fund focusing on the developed regions, raised $1.2 billion and was the largest European debut fund of the year. AlpInvest Partners and UniCredit Group (UniCredito Italiano SpA) are known to have committed to the fund.

Looking at the interim years, 2013 was an anomaly in terms of fundraising from first time managers with $8.1 billion having been collected by 32 funds. HayFin Special Opportunities Credit Fund was the largest fund to close that year at $1.48 billion with commitments from Pennsylvania Public School Employees' Retirement System and HOSTPLUS.

Only four European debut funds closed in Q1 2015, all raising less than $100 million.

Generally, investors are less open to allocating their capital to debut managers now than in the past. In a study with montana capital partners, 62 percent of family office respondents revealed that they would not invest in a first-time fund in the coming year.  LPs are more insistent on seeing a demonstrable track record before committing, making life harder for those trying to get their first fund off the ground