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The Strength of Private Equity in West Europe – March 2015

by Matthew Morris

  • 10 Mar 2015
  • PE

European economies have been experiencing mixed fortunes since the turn of the year, with Greece’s continued fiscal troubles leaving the future of the Eurozone in doubt. Some parts of the continent have fared better than others amid this challenging economic environment. This blog will utilize data from Preqin’s Fund Manager Profiles online service to evaluate the strengths of European private equity, examining West Europe’s stature as a large industry player.

Outside the dominant US private equity and venture capital industry, West Europe is the next largest region in terms of the number of funds raised and the number of active firms. Today, there are 1,482 active private equity firms based in West Europe, having raised a total of €515bn in the last decade. Comparatively, the US is home to 4,106 active private equity firms and has raised the equivalent of €1.6tn. 

As the chart above illustrates, 40% of West Europe-based firms are located in the UK, with the majority of these headquartered in London. London-based private equity firms alone account for 59% of the €515bn in capital raised in West Europe over the last 10 years, more than the total raised by Germany and France combined. The firm that has raised the largest amount in the region over the past decade is London-based CVC Capital Partners, which has amassed an aggregate €39bn in capital commitments.

Despite a gloomy outlook on the region in wider economic news, Europe-focused fundraising has grown year-on-year since 2010, with 2014 seeing €103bn accumulated by Europe-focused fund managers, up 10% on the total collected in 2013. Despite West Europe’s dominance in terms of Europe-based fund manager numbers, there seems to be a trend for capital to be focused on Europe as a whole, as opposed to specifically West Europe, or any other sub-region. Last year, 65% of all Europe-focused capital was raised by funds with a multi-regional investment preference; only 26% of funds focused specifically on West Europe. This may be due to the improving economic condition in some Southern European states, such as Spain, or the growing technology scene in Central Europe which is attracting further venture capital interest.

So far in 2015, West Europe-based fund managers have raised €5.4bn and currently have 361 funds in market targeting a further €116bn, highlighting the continued strength of the private equity industry in the region. With London’s Silicon Roundabout bolstering the city’s importance in the venture capital space, West Europe will continue to appeal to the wider investment world.

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