PE fundraising in Europe spikes 80%

The European Private Equity and Venture Capital Association’s annual survey revealed funds in 2011 raised the most capital since 2008.

During a time of economic turmoil in Europe, limited partners in the region have turned to private equity as a way to find returns.

That's according to an annual survey from the European Private Equity and Venture Capital Association. The survey revealed that private equity managers raised €40 billion in the region in 2011, with 65 percent of the total new funds raised coming from European countries. 

The fundraising was initiated by both venture capital, seeing fundraising grow by 50 percent, and buyout and growth doubling the amount of new funds raised in 2011. More than 83 percent of the equity raised came from three regions, the UK and Ireland, the Nordic region and France and Benelux.

Last year, 4,800 companies backed by the industry were small to medium sized enterprises (SMEs) and Langer added “it is these businesses that will drive growth and emergence from the recession.” 

Investments increased by a modest 6 percent in 2011 stabilising at around €45.5 billion. Buyout and growth funds accounted for 91 percent of this amount but venture capital invested in 3,140 of the 4,800 companies.

Strong venture capital investment in the life sciences, computer and consumer electronics and communications made them the most active sectors. Buyout and growth funds were also active in consumer goods and retail, business and industrial products and services. 

Divestments were up 50 percent to €30 billion and were triggered by buyout and growth funds exiting in the secondaries market and through trade sale. The two exit routes contributed to 63 percent of the market at €18.8 billion.