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New figures show dismal Q2 activity in Europe's private equity market

Europe's private equity market was dismally quiet in the second quarter of this year, according to new figures. There were just 57 buy-outs worth a paltry E5.2bn, compared with 64 deals worth E9.6bn in the first quarter.

The Initiative Europe data shows activity is continuing to slow across the region, with little sign of an upturn. The second quarter of 2001 boasted 96 deals worth E22.9bn, an unrecognisably busy period compared with the present situation.

The release blamed some of the ongoing decline on the evaporation of the sort of mega-deals that had boosted the figures last year. The underlying reason, however, appears to be the extreme uncertainty of public markets and related doubts about medium-term economic prospects.

Early-stage private equity deals also struggled in the second quarter, although there was a modest uptick in the volume and value of activity. There were 40 deals worth E600m, compared with 39 deals worth E100m in the first quarter. The annual comparisons, however, showed a much starker picture - there were 140 early-stage deals in the second quarter of 2001, worth around E1bn.

The second quarter recorded 1,612 growth capital deals valued at E1.9bn, down from 185 deals worth E2.3bn in the first quarter. There were 252 deals worth E4bn in the second quarter of 2001.

The fundraising picture was not quite as bleak. Indeed, it bounced back quite dramatically from the first quarter. The value of private equity and venture capital funds raised leapt to E12.8bn in the second quarter, compared with E3bn in the first and E15.5bn in the same period last year. The volatility of the quarterly data reflects the effect of a handful of mega-funds being raised in close proximity.

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