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Forward Looking: 12 Month Investment Plans of Europe-Based Private Equity Fund of Funds Managers

by Francesca Braganza

  • 06 Jun 2014
  • PE

Preqin’s Investor Intelligence online service currently tracks 103 Europe-based private equity fund of funds managers, 76 of which are planning to make new fund commitments over the next 12 months. These 76 firms have $433bn of private equity assets under management, and intend to invest up to $13.5bn into the asset class over the coming year. They are mainly headquartered in a range of countries across Western Europe, including Switzerland (22%), the UK (17%), France and Germany (both 14%). 

Globally, Europe-focused vehicles are to be the most targeted by these fund of funds managers over the next 12 months, with 88% of these LPs specifying a particular preference for private equity investment opportunities in this region. Over half of these investors (56%) have conveyed an interest in North America-focused funds, with other targeted regions including emerging markets (42%) and Asia (41%). 

Buyout is the most popular choice of fund type that European fund of funds managers will pursue over the next 12 months. Preqin’s data shows that 84% will be actively seeking opportunities to invest in such vehicles, and 64% will be targeting growth funds. Other fund types being sought after over the coming year include venture capital (59%), special situations (32%), distressed debt (29%) and turnaround funds (27%). The notable proportions of European fund of funds managers attracted to distressed private equity funds is in line with the marked appetite from players in the private equity industry. These players are looking to capitalize on the investment opportunities to be found in businesses recovering from the latest economic turmoil in the continent in particular. 

Furthermore, a number of Europe-based fund of funds managers will be actively investing on behalf of separate account mandates, with 77% either currently managing or interested in managing these structures. Ninety percent of the firms will act as first-close investors over the coming 12 months, and 85% currently consider working with first-time fund managers and spin-off teams.

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