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Investors in European private equity.

by Tom Carr

  • 15 Nov 2011
  • PE

European economies and markets have dominated the news over the past month, with the Eurozone sovereign debt crisis leaving many investors wary about investing in the region. Preqin’s Investor Intelligence database contains 2,367 LPs that have expressed a preference for investing in Europe or have previously invested in the region, showing that nearly two thirds (63.9%) of all investors in private equity will consider private equity funds targeting investments in Europe. Only North America, which 67.7% of LPs target, attracts a higher number of institutional investors.

The most prevalent type of LP investing in Europe is public pension funds, which make up 15.3% of the total number of investors with an interest in funds targeting Europe, followed by foundations and private sector pension funds, which make up 13.4% and 12.7% of investors respectively. This corresponds reasonably closely with the breakdown of all investors in private equity, of which 12.7% are public pension funds, 12.9% are foundations and 13.4% are private sector pension funds. When investor preferences are broken down further, it can be seen that public pension funds are more active in European private equity compared to other investor types. 76.8% of all public pension funds that are active in private equity consider investments in Europe. By contrast, 66% foundations and 60.6% of private sector pension funds consider investments in Europe.

When looking at the location of investors in private equity funds with exposure to Europe, 47.7% are based in North America; 41.8% are based in Europe itself, the remainder are based in rest of world. However when compared with the number of active private equity investors in these regions it can be seen that European investors are far more likely to invest in their local region than outside investors. 85.2% of all Europe-based LPs consider investments within Europe, compared to 60% of North America investors and only 37.4% of rest of world LPs, illustrating that local LPs remain vital in fundraising for European-focused vehicles.

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