Widening gulf between the haves and the have-nots

The vision, according to Carlyle's co-founder, is of a market dominated at one end by global, multi-asset-class managers and at the other by a population of specialist players operating along niche strategies. What's more, there is a strong likelihood that under this scenario the former group may look to acquire some of the latter to complete their spread of product offerings. Whether or not this prediction becomes a reality it seems certain that the private equity landscape will change rapidly in the coming years.

In the current environment, though, this polarisation is of a more existential nature. While many of the fundraisers currently braving the conditions are finding the process extremely tough - challenging their very existence - others are clearly not. Take, for instance, Inflexion Private Equity: the UK lower mid-market specialist made light work of its latest fundraising programme, reaching a £375m hard cap in just three months. This is a far cry from the GP's second fund, which was also raised during a particularly lean period for fundraising. For that vehicle, Inflexion went out to market at the end of 2001 with a €100m target, held a first close on half that in summer of 2003 and reached a final close on €95m in March 2004.

And Inflexion's recent success is by no means restricted to the UK market. Sweden's Litorina Capital today announced the close of its fourth vehicle at a hard cap of SEK 2.5bn. The fundraising had taken just 5 months and was heavily oversubscribed. Anecdotal reports also suggest that other funds, such as those being raised by Argos Soditic, Valedo and AFINUM are also attracting significant attention.

So is this kind of success down to the past track record of the GP, its current strategy in a changing landscape, or just being in the right place at the right time? Of course, it is probably all of the above but it is most definitely symptomatic of the widening gap between the haves and the have-nots.

Given that there is a clear leaning towards smaller funds with more operationally-focused or niche strategies, it will be interesting to see how the larger buyout investors fare when they hit the fundraising trail. True, many of these groups have the requisite track records, having made extraordinary returns on the funds raised and invested in the few years before the peak of the market, but since then, the playing field has changed dramatically. Either way, we will not have to wait long to find out: the recent up-tick in deal flow across Europe is enough to confirm that the reserves of dry powder at the top end of the market are being burned away quite efficiently once again.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Send to  

• Topics
• Fundraising
• DACH
• France
• Nordics
• Southern Europe
• CEE
• UK / Ireland
• Benelux
• Argos Wityu
• Inflexion Private Equity
• Carlyle Group