Private Equity Investor Appetite for Europe – November 2013

by Lauren Mason

  • 19 Nov 2013
  • PE

Private equity opportunities within Europe appear to be becoming increasingly attractive to investors in 2013 following the sovereign debt crisis experienced by the region. Preqin’s Investor Intelligence online service currently tracks over 5,200 active investors in private equity funds, with a significant 2,617 of those LPs having expressed a preference for investing in Europe.

The most predominant type of LP investing in Europe is private sector pension funds, which make up 16% of the total number of investors with an interest in funds targeting Europe. The next most common type is foundations, making up 14%. This is followed by public pension funds and endowment plans, which make up 13% and 10% of investors respectively. This corresponds reasonably closely with the breakdown of all investors in private equity, of which 14% are private sector pension funds, 14% are foundations, 10% are public pension funds and 10% are endowment plans.

When looking at investors’ preferences within Europe, 774 (30%) have a specific preference for Western Europe. Thirteen percent of Europe-focused investors choose to target the Nordic region and 11% are targeting Central and Eastern Europe. When looking at the location of investors with a preference for Europe-focused private equity funds, 50% are based in North America, while 41% are based in Europe itself, with the remainder based in Asia and Rest of World.

A number of LPs have made commitments to Europe-focused vehicles so far in 2013. District of Columbia Board invested $15mn in CVC European Equity Partners VI, as well as in HIG European Capital Partners II, both Europe-focused buyout funds. Idinvest Digital Fund II, a Europe-focused venture capital fund that recently held its first close, has received commitments from a number of LPs including €11mn from Lagardère Group.

With investors with a preference for investing in private equity opportunities in Europe representing $64tn in combined assets under management of those with a preference for Europe and with 269 Europe-focused private equity funds on the road targeting $103bn, there is a sense that the European private equity market has the potential to grow.

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