Private Equity News & Analysis

European fundraising holds steady in 2001

Total funds raised by European private equity firms dropped by only 4 per cent last year, compared to 2000, though there were far fewer funds raising a much higher average total.

By
PEI Staff
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Total funds raised by European private equity firms dropped by only 4 per cent last year, compared to 2000, though there were far fewer funds raising a much higher average total.

Figures just published by UK research firm Initiative Europe show that fundraising levels remained fairly buoyant last year despite a significant decrease in the number of funds being raised.

Last year saw E37.2bn raised for investments in European private equity, down only four per cent down on the previous year despite a 40 per cent drop in the number of funds raised from 164 in 2000 to 104 last year.

The report attributed the robust fundraising figures to the increased number of megafunds raised – funds of E1bn or more were responsible for raising over half (E20bn) the funds raised in 2001. The Apax Europe V and CVC European Equity Partners III funds set the pace, raising E4.4bn and E4.7bn respectively. These large funds helped make average fund size rise dramatically, up from E340m in 2000 to E472m in 2001.

The results for 2001 are in line with those published recently by the EVCA, although the two reports show contrasting comparisons year on year. The EVCA suggests that the E38bn raised in 2001 represented a 20 per cent drop against the 2000 figures, whereas Initiative Europe's figures suggest that the E37.2bn raised in 2001 equates only to a four per cent fall.

US investors remain hugely influential for European funds. North American institutions contributed nearly half (46 per cent) of the total E37bn ($35bn) raised, three times the figure contributed by the UK buyside and seven times that committed by German or French firms.

Of the 104 funds launched last year, 71 were venture capital funds and these managed to raise E8.8bn. The hottest sector in 2001 was biotechnology, which attracted over E3bn in investment commitments.