Brexit failing to dent UK PE fundraising, but Europe region set for lowest annual numbers in years


European private equity fundraising numbers could fall to some of their lowest results in years across 2019 according to the latest research from data provider Pitchbook.

Buyout fundraising is trending towards its worst result in a decade in terms of the number of funds closed, the company’s 3Q 2019 European Private Equity Breakdown said, as well as the smallest amount of capital raised in three years.

Those figures – €51.6bn was raised across 64 funds in Q1 to Q3 – could still prove to be above any other year for the last decade bar 2017 and 2018, but an outsized proportion of the year’s activity coming from H1 could mean a severe cooling has begun.

CVC Capital’s €4.6bn Strategic Opportunities Fund II was the biggest fund to close in Q3, PitchBook said, exceeding its €4bn within 12 months.

The fund represented a roughly 15 per cent uplift from the firm’s 2014 predecessor, which the report said exemplifies higher step-ups across most buyout vehicles in recent years.

Despite – or perhaps because of – huge uncertainty in the UK & Ireland amid the ongoing Brexit confusion, the region was the only one in Europe to close at least one fund on €1bn or more.

In fact, CVC’s hefty raise was joined by Permira’s €1.5bn Growth Opportunities Fund I and Oakley Capital’s €1.5bn Private Equity Fund IV in Q3.

PitchBook said the data showed an increasingly bifurcated fundraising market in the region, with established UK and Ireland managers able to leverage their impressive track records, multinational LP base, size and scale to accelerate fundraising, while more esoteric managers face an anaemic fundraising market.

It said that there has been a 15 pe cent uptick in fundraising value for the top 10 PE funds closed in the UK & Ireland year on year.

Cinven’s €10bn seventh fund was the main driver of fundraising figures in Q2, but the latest fund closes, as well as big funds from Carlyle Europe Technology Partners and Inflexion seem to show the region’s fundraising activity has stabilised from last year’s sharp drop.

PitchBook previously highlighted the France and Benelux region as experiencing rapid growth, with especially strong Q1 2019 figures.

The region’s fundraising environment has significantly cooled through Q3, however, with the €375m Amethis Fund II the largest closed fund in the region since 1Q’s record-breaking quarter.

PitchBook said the French and Benelux region has now raised €13.5bn in the year to date, with an “astonishing” 93.3 per cent of that total coming in the first quarter.

The region is still on track for a record year in terms of absolute fundraising figures and overall share of activity, but the uneven distribution of fundraising may be a concern.

PitchBook also said the acceleration in capital commitments for PE growth funds had been palpable in 2019, and is on track for a record year.

PE growth funds have raised €9.3bn so far this year, eclipsing all full-year figures apart from 2011’s €10.1bn.

Copyright © 2019 AltAssets