Make-up of Investors Expecting to Commit to Europe-Focused Funds - March 2013

by Emma Underwood

  • 19 Mar 2013
  • PE

Despite  the recent volatility within European markets, it is encouraging for managers raising Europe-focused private equity funds to know that of the 993 institutional  investors on Preqin’s Investor Intelligence database expecting to make new commitments to the asset class within the next 12 months, 368 (37%) expect to make new commitments to Europe-focused private equity funds.

Of those LPs looking to commit to Europe-focused funds over the next 12 months, public pension funds account for 25% of investors expecting to make commitments to funds focusing on the region over the coming year, followed by insurance companies (13%), private sector pension funds (12%) and foundations (10%).

Interestingly, over half (59%) of LPs looking to invest in Europe over the next year are based outside of the region, with 50% of LPs looking to invest in Europe-focused funds based in North America, 5% in Asia and 4% are located in Rest of World. Forty-one percent of LPs looking to invest in Europe over the coming year are based within the region, 69% of which are based in West Europe, 29% in the Nordic region and 2% are located within Central and Eastern Europe.

Buyout funds are the preferred fund type amongst investors with plans to invest within Europe over the next 12 months, with 77% of investors stating a preference for this fund type for their forthcoming fund commitments. Other fund types focusing on Europe that LPs will look to commit to over the next 12 months include venture capital which was stated by 54% of LPs, growth funds (45%), distressed private equity (42%), funds of funds (35%) and secondaries vehicles (28%).

It is clear that there is still a significant level of investor appetite for Europe-focused private equity funds going forward. A sample of investors looking to make new commitments to the region include Massachusetts Pension Reserves Investment Management Board and New Mexico Public Employees' Retirement Association, as well as New York State Common Retirement Fund, which expects to commit $2bn to new private equity fund commitments over the next 12 months, including Europe-focused funds.

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