PE capital calls at 10-year low in 2021– Investec

Investec’s survey took into account activity from 45 UK and European private capital funds over the past 10 years. The funds surveyed ranged in size from EUR 150m - EUR 3.75bn. Almost three quarters (73%) were private equity funds, with the remainder made up of secondaries, real estate and nice strategies, according to the research.

The research comes following a year when sponsor-backed deals reached a record high in both value and volume. Sponsors made 1,384 buyout deals in 2021 totalling more than EUR 306bn, according to Unquote Data. While 2022 is unlikely to reach the same record given the current macroeconomic uncertainty, sponsors have completed 443 buyouts to date totalling more than EUR 102bn, preliminary figures from Unquote Data show.

In a statement, Oliver Bartholomew, a fund finance professional at Investec, put the slow-down in part down to the fact that private equity CFOs have an increasing range of financing and bridge options available to them, meaning that they can reduce the operational burden of capital calls.

Additional factors at play include the increasing size of private equity funds, Investe said in the same statement. Private equity and venture capital fundraising in Europe reached more than EUR 288bn in 2021, and 2022 is keeping pace with more than EUR 108bn raised to date, according to Unquote Data. The average fund size is also steadily creeping up; it stood at EUR 835m in 2021, versus almost EUR 1.1bn in 2022.

This is evidenced by recent closes including Advent’s USD 25bn fundraise for its latest fund, as reported. The sheer volume of these vehicles make limiting capital calls a once- or twice-yearly event more efficient, the statement noted.

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