Times are getting tougher for European fund managers. Analysis of this year’s fundraising totals – which include all capital raised since the start of 2008 – suggest that European-focused firms have become markedly less attractive to investors in the years since the 2007-2008 financial crisis.
For last year’s PEI 300, which included funds closed during 2007, European firms accounted for $230 billion, or 18 percent, of the total capital raised by the 300 firms over the preceding five-year period. This year, with 2007 funds no longer counting, that number has fallen to $180 billion, or 16 percent of the five-year total (with UK firms the biggest fallers).
This is not surprising. Anecdotal evidence suggests that many big LPs (particularly in North America) remain very wary of backing European funds, while some are black-balling them entirely.
According to PEI’s analysis of 2012 fundraising, Western Europe-focused firms accumulated less than half as much capital last year as they did in 2011 – and European funds attracted a smaller proportion of the total capital raised globally than at any time since the financial crisis.
There have been some notable successes in the last 12 months, including the likes of Equistone, Deutsche Beteiligungs, Cinven and most recently HgCapital. But they seem to be exceptions to the general rule