Despite relatively slow economic growth and an increasingly complicated political environment, 2015 saw Europe-focused private equity funds raise a post-crisis high of €65bn. This momentum has continued into 2016, where 90 Europe-focused private equity funds have already secured a combined €58bn; despite the uncertainty surrounding the UK’s decision to withdraw from the EU, fundraising should surpass the amount of capital raised in 2015 and potentially reach pre-crisis levels.
As shown on Preqin’s Private Equity Online database, the second quarter of 2016 was particularly strong: 45 Europe-focused private equity funds raised an aggregate €30bn, over double the amount raised during the same period last year (€13bn) and matching the amount of capital secured in the whole of 2010. Furthermore, this total, together with the €26bn in capital raised in Q1 2016, makes Q1 and Q2 the most successful quarters for Europe-focused private equity fundraising since Q2 2007 (€32bn), emphasizing the strong private equity fundraising environment in the first half of 2016.
So far, 2016 has seen three Europe-focused private equity vehicles reach a final close with over $10bn in institutional equity. Advent International’s buyout fund, Advent Global Private Equity VIII, reached a final close in May at $13bn, making it the largest Europe-focused private equity fund ever raised. May also saw TPG secure $10.5bn for TPG Partners VII, while one month later Ardian Secondary Fund VII became the largest secondaries fund ever by securing $10.8bn in commitments. Unsurprisingly, given that two of these three vehicles were buyout funds, buyout fundraising has accounted for 55% of all capital secured in 2016 so far. Secondaries fundraising represents just over a fifth of capital raised in 2016, while venture capital funds represent 12%.
Nearly three-quarters (73%) of Europe-focused private equity funds closed in 2016 so far have met or exceeded their initial target size, up from 69% in 2015. Furthermore, this trend is not restricted to experienced managers: 56% of funds raised by first-time fund managers in 2016 have met or exceeded their targets, compared to 53% in 2015.