Fund-a-mentals for 2008

With a relatively quiet deal front, it would surprise many to hear that fundraising continues apace, with funds closing on or even above target. This month saw Pragma Capital hold a final close on its second fund Pragma II at EUR345m, far exceeding its original target of EUR300m. XAnge Private Equity also held a final close of new fund XPansion at EUR50m. In the light of financial trouble XAnge also demonstrated a show of flexibility and adaptation to the market conditions by focusing a fund on capital development for the first time.

Surrounding this resurgence of fundraising, the rumor mill has been churning out imminent closures of European mega funds from major private equity players. Bain has reportedly closed a EUR3.5bn European fund while Bridgepoint is reported to have raised around EUR4bn of its fourth fund and PAI over EUR5bn. Final closures are expected from KKR at around EUR6bn for its European fund and Apax is said to be hovering around the EUR10bn mark. Finally CVC is allegedly nearing a EUR12.1bn close which would be the largest European fund ever raised.

Such large funds should indicate that appetite and a pipeline in the mega-LBO space - perhaps as soon as the end of the year - or alternatively, a massive capital overhang. Although it is expected that LPs would exercise a greater degree of caution when it comes to investments, Q1 of 2008 is suggesting a healthy fundraising climate for the forthcoming year if the current fundraising climate is sustained.

Yours sincerely

Francois Rowell, Editor, France unquote"

Tel: +44 20 7004 7524

francois.rowell@incisivemedia.com.

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