European Private Equity Fundraising Drops 20% in 2008

According to the EVCA, European Private Equity funds raised €65.3 billion last year, a fall of 20% when compared to the €81.4 billion they raised in 2007. For the year, 128 funds reached a final close, down from 144 in 2007. Average fund sizes also tumbled, from €496.9 million in 2007 to €425.7 million in 2008.

Venture and Growth Capital proved to be fundraising bright spots as 47 VC funds reached a final close (compared with 37 the previous year), with an average fund size of €84.7 million. For Growth Capital, ten funds raised nearly €3 billion, compared to nine funds raising €2 billion in 2007.

The number and value of buyout funds fell from 62 funds that raised €56.5bn in 2007 to 53 funds raising €44.4bn last year. And in terms of the sources of capital raised, pension funds were by far the largest contributor, accounting for 23% of all funds raised or €15.2bn, compared with 17% and €13.9bn in 2007. At the same time bank commitments halved from just over €9bn to €3.8 bn.  

Additonally, the EVCA included numbers on exits which, when measured at cost, were reduced by halve in 2008, from €26.6 billion in 2007 to €13.1 billion, with trade sales and secondary buyouts representing two-thirds of the exits. Unsurprisingly, the public markets were effectively closed with only nine IPOs occuring, six of which were venture-backed companies and three buyout-backed.

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