Chart of the Week: European Fundraising Fluctuates

European fundraising at low level throughout past halves - despite hike in H12013


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In absolute terms, the capital raised by European funds subsists at a fairly low level – always below $2.5 billion – apart from H1 2013, where the capital raised by European infrastructure funds jumped to almost $7 billion. This spike was followed by a return to usual levels, with capital raised in H2 2013 and H1 2014 being $1.2 billion and $0.9 billion, respectively. The only pattern visible here is that abnormal levels of raised capital revert back to the norm in subsequent halves. High level of direct investments in the asset class, which can be readily seen in the advanced western European economies such as The United Kingdom, France, and Germany, could be a reason for the generally low level of fund raising seen in the region. The spike in H1 2013 coincides with the easing of the Eurozone crisis when many investors saw the lower valuation of assets in the region as good investment opportunities.

European funds’ average size does not allude to any particular trend either. The numbers on either side of the outlying H1 2013 mirror each other; H1 and H2 of 2012 give us an average fund size of $560 million and $300 million, respectively. On the other side of the anomaly, average fund size for H2 2013 and H1 2014 was $250 million and $430 million, respectively. For H1 2013, the average fund size was three times the size of the next biggest average at $1.7 billion.

The number of European funds closed seems to follow a random walk which draws a zigzag across the chart. It appears that the number of funds being raised becomes a little more volatile as we approach 2014, with the two extreme values being in H2 2013 and H1 2014.

European funds as a percentage of the total is the most volatile figure in this analysis. It has high points in H1 2012 and H1 2013 at nearly 20 percent and 29 percent, respectively. For all the other halves, the figure fluctuates between a lowly 4.5 percent and 6.5 percent.