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EMEA-Based Private Equity Investor Activity – March 2016

by Matthew Frankis

  • 17 Mar 2016
  • PE
  • VC

Preqin’s Private Equity Online currently tracks 1,408 institutional investors based in Europe, the Middle East and Africa (EMEA) that are currently investing in private equity funds. Collectively, these LPs represent over a quarter (28%) of all private equity investors worldwide, contributing 38% ($36tn) of aggregate capital currently invested in the asset class.  

The vast majority (84%) of EMEA-based investors are based in Europe, followed by the Middle East (11%) and Africa (5%). These LPs have a preference for funds focused on their domestic markets; 79% of Europe-based investors maintain a preference for Europe-focused funds, while 82% and 54% of Africa- and Middle East-based investors respectively have an appetite for domestic investment. In comparison, 58%, 73% and 44% of Europe-, Middle East- and Africa-based LPs respectively maintain a preference for private equity vehicles focused outside their domestic market. An example of a Middle East-based LP that has recently invested in a Middle East-focused private equity fund is Kuwait-based Zain Group. The KWD 3.3bn corporate investor committed to Middle East Venture Fund II, gaining exposure to early stage technology and mobile businesses.

As seen in the chart above, the majority of EMEA-based investors have a preference for venture capital funds. Although 46% of investors have a preference for buyout vehicles, the strategy preference is more common among Middle East- and Europe-based investors, with nearly half of both populations indicating a preference, compared with just 31% of Africa-based investors. However, over the next 12 months, a larger proportion of EMEA-based investors are targeting buyout funds (55% of active investors) than venture capital funds (30%). For example, Denmark-based Lundbeck Foundation will be committing between DKK 220mn and DKK 370mn to one Europe- or North America-focused buyout fund in the next year.

EMEA-based private equity investors account for four of the top 10 largest investors in private equity by current allocation. Examples include Netherlands-based ABP, which invests 5.2% of its total assets under management (AUM) to the asset class (€18bn), while Kuwait Investment Authority, the $59.2bn sovereign wealth fund, currently allocates an estimated 5.5% of its AUM to private equity.

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