Europe-Focused Distressed Private Equity Funds - September 2012

by Stuart Hunter

  • 25 Sep 2012
  • PE

As highlighted in Preqin’s Private Equity Spotlight – September 2012, there are an increasing number of distressed private equity funds currently being raised. The feature article explores whether the ongoing eurozone sovereign debt crisis is tempting a number of fund managers to launch vehicles designed to take advantage of the investor appetite for distressed investment opportunities arising in the region. At present there are 15 Europe-focused distressed debt funds on the road collectively targeting €7.2bn in capital commitments, according to Preqin’s Funds in Market database. Of these funds currently raising, five have had at least one interim close, collecting €350mn in capital commitments to date.

By type, distressed debt and special situations account for the largest proportion of aggregate capital being raised by distressed private equity funds, making up 76% and 15% of the total respectively. Turnaround funds account for the remaining 9% of aggregate capital targeted by distressed private equity funds.

The average target size of the 15 funds in market is €478mn, with the largest Europe-focused fund, Apollo European Principal Finance Fund II, seeking €2.5bn. Apollo European Principal Finance Fund II has a diversified industry focus and aims to capitalize on opportunities in the non-performing loans sector in Europe. The second and third largest funds are Ares Capital Europe II and Strategic Value Global Opportunities II, targeting €1.5bn and €612mn respectively.

In 2012 so far, five European-focused funds have reached a final close, having raised €4.4bn in aggregate capital commitments, with the average final close size amounting to €875mn. The capital raised by these five funds makes up 20.8% of the capital raised by distressed private equity funds closed in 2012 across the globe.

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