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Fundraising on track to surpass 2018's dip

Unquote Events
17 April 2019

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Buyout fundraising in the UK plummeted by more than half in 2018 to €24.5bn from €52bn the previous year, according to data presented at Unquote's European Fund Structuring Breakfast.

The event gathered senior professionals from private funds, and tax and finance advisers to discuss market trends. The sessions examined how Luxembourg's RAIF structure has been adopted, and what impact Brexit would have on UK-domiciled private equity funds.

To set a context for the event, head of Acuris funds research Paul Tilt provided an overview of European private markets fundraising activity.

The trend in the UK reflected an overall decline at a European level from the highs of 2017, when 90 private equity funds closed with commitments of €80bn. However, LPs continue to increase their commitments to private markets. So far in 2019, 29 buyout funds have raised nearly €24bn, which is already 43% of the final amount raised in 2018.

European direct lending funds raised €22bn in 2018 across 19 funds – another dip on 2017 levels, which saw 25 funds raise €32bn. However, the ambition of European direct lenders seems to continue unabated, according to a recent survey. More than a quarter of respondents expect €30bn of commitments to European direct lending funds in 2019. Third generation funds with a demonstrable track record are currently out in the market, with Alcentra targeting €5bn for Fund III and Permira targeting €2.5bn for Permira Credit Solutions IV.

Private equity secondaries fundraising has been something of a bright spot: 11 funds are in the market and expected to hit final close this year targeting €44bn in commitments.

The largest private equity fund closes in Q1 2019 included Triton Partners, which raised €5bn for The Triton Fund V; Astorg Partners, closing Astorg VII on €4bn; and Altor, which successfully raised €2.5bn for Altor Fund V.

Global infrastructure fundraising continues its expansion of recent years. While 42 funds secured €62bn in 2018, more than 70% of that capital could target European infrastructure opportunities, the highest proportion on record.