Positive Signs for Private Equity in Ireland – November 2014

by Chloe Wong

  • 24 Nov 2014
  • PE

After exiting the €85bn international bailout programme at the end of 2013, Ireland’s economy is set to become the fastest growing of any European Union (EU) state this year, with the Finance Minister, Michael Noonan, predicting growth of 4.5%. For Irish companies and private equity fund managers this is positive news: it may put Ireland back on the map and attract new investments, especially from foreign investors. 2014 has seen many international players becoming increasingly active in the Irish market. For example, Carlyle Group has made two growth investments in the Emerald Isle so far this year, according to Preqin’s Buyout Deals Analyst

From the height of the financial crisis in 2008 to 2014 so far, Preqin’s Funds in Market online service shows that investors committed €16bn to funds targeting Ireland as part of a wider geographic focus, as seen in the chart below. 2014 has seen the strongest fundraising levels to date for funds investing in Ireland as part of a wider focus; 43% of private equity funds closed this year have exceeded their target size. Ireland's private equity environment is dominated by funds raised by international fund managers, especially from other European countries and North America. These managers have led 67% of fund closures, accumulating €5.2bn against the €405mn from Ireland-based GPs. 

The largest fund currently in market that is aiming to invest in Ireland as well as other countries is Doughty Hanson VI. This buyout vehicle is managed by the UK-headquartered firm, Doughty Hanson Partners, and has a target size of €2bn. The fund invests in middle-market to large-sized European businesses in a broad range of industries, and has yet to hold any interim closes. The firm has been an active investor in Europe and over the last decade. It has raised €4.6bn, according to Preqin’s Fund Manager Profiles database. 

Foreign investors are helping to revive Ireland’s private equity industry, and Preqin’s statistics show that there are positive signs of renewed investor confidence in Ireland. The country’s upgraded credit rating from Moody's may have contributed to this growing investment trend, as well as other economic factors. Overall, Ireland’s private equity environment looks bright and may continue to strengthen in 2015.

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