European fundraising surpasses pre-crisis high

Christopher Papadopoullos
22 March 2017

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Last year was the best year for European fundraising since the boom years preceding the financial crisis, according to unquote” data. Chris Papadopoullos reports

Funds with European offices and remits to invest in Europe that held final closes last year raised €119.7bn, up 37% on 2015. Looking back to the pre-crisis peak, vehicles holding final closes in 2007 raised a total of €107bn.

The impressive amount of cash raised was not just down to a few multi-billion-euro large-cap outliers. There were two funds that closed above €10bn, but excluding these would still take the 2016 fundraising value above the 2015 figure. Last year's fundraising was so successful that two funds, Ardian Secondary Fund VII and Advent International GPE VIII, were in the largest five funds ever recorded by unquote".

This reinvigorated desire to invest in Europe comes against a quietly improving economic backdrop. The economy of all 28 EU members grew by 1.9% in 2016, while that of the 19 eurozone members grew by 1.7%. This compares to 1.6% in the US. Europe has achieved this steady growth despite troubles over non-performing loans in a number of big banks and the ongoing fiscal crisis in Greece.

This year has got off to a strong start in terms of fundraising. Just under €30bn has been committed to funds at final close, with less than a quarter of the year gone. This includes Permira's €7.5bn buyout fund Permira VI and Dyal Capital Partners' €4.8bn fourth fund.

The unquote" Annual Buyout Review reported a much improved fundraising environment in every region of Europe, with demand fueled especially by international investors. Some local institutional investors, notably those in Italy and Spain, are still reluctant to invest in the asset class for a variety of reasons.

The following are the five largest final closes held in 2016:

5. Cinven VI
Cinven's sixth fund held its final close in June, closing on its €7bn hard-cap after just four months on the road. It will invest €150-600m equity tickets in management buyouts across Europe, the US and Asia and across a range of sectors. The fund has so far completed deals for footwear retailer Kurt Geiger for €348m and consumer finance firm NewDay.

4. Apax IX
Apax IX had its final close in December, raising €8bn for buyout investments mostly in Europe and across a range of sectors. In July, the fund added German Pharmaceutical firm Neraxpharm to its portfolio and acquired Swiss medical diagnostics firm Unilabs in December. The fund was launched with a target of €6.7bn, which it exceeded at its first close.

3. TPG Partners VII
TPG exceeded its seventh fund's €7bn targer to reach €9.2bn by final close in May. It is understood the GP was forced to limit commitments from some LPs, while other investors were unable to be accommodated at all. In 2015, the fund bought UK retailer Poundworld for €207m. It has also invested in a number of firms in North America, including Canadian circus company Cirque du Soleil.

2. Advent International GPE VIII
Advent closed its €11.9bn flagship global large-cap fund in March. It has since made six purchases across Europe, the biggest of which is French firm Safran Identity and Security, bought for €2.4bn. Three of the acquisitions are consumer finance businesses. The fund also targets firms in North America but is yet to complete a deal there.

1. Ardian Secondary Fund VII
The fund had raised €12.3bn by the time it had its final close in April. The majority of the vehicle's capital will be directed towards secondary investments (both in existing funds and direct stakes in firms), while the remainder will be aimed at investments in new funds. Ardian is preparing to launch a new primary fund this year.