CVC fund drives bumper H1 for Europe

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The closing of the largest-ever European private equity fund, CVC Capital Partners VII, drove fundraising figures for Europe-based funds to record levels in the first half of 2017, according to PEI data.

Just over $54 billion was raised by 60 funds in the first half, compared with $37 billion raised by 61 funds in the first half of last year and $20 billion by 49 funds in H1 2015. This is the highest first-half amount raised by Europe-based private equity funds since at least 2010.

If fundraising continues at this pace, 2017 is set to outstrip 2013, a peak year for European firms when 138 funds raised $94 billion. That was the year CVC raised its previous fund, the €10.5 billion CVC European Equity Partners VI.

That fund was delivering a net internal rate of return of 1.8 percent and a total value to paid in of 1.02x as at 30 September, according to documents prepared for a New Jersey State Investment Council investment meeting in March. However, the vehicle is still investing.

Fundraising has already overtaken the $40 billion figure raised in 2010 and 2011 and the $37 billion the following year 2012.

More than a quarter of the capital LPs committed to Europe-based funds in the first half went to CVC Capital Partners VII, which raised €15.5 billion from third-party investors. It reached €16 billion through a GP commitment.

Investors in the fund include Massachusetts Pension Reserves Investment Management Board, Teachers’ Retirement System of Louisiana and New Jersey Division of Investment.

But it is becoming increasingly like the capital will be deployed outside Europe. In April and May, 80 percent – or €17.6 billion – of capital invested by EMEA GPs was deployed into cross-border companies, according to data from S&P Global Market Intelligence. This compares with just €5.8 billion for the same period in 2016.

Asia-Pacific proved most attractive, receiving €13.1bn of capital from the EMEA GPs across just 12 deals.