2010 European Mid-Market Review
22 Mar 2010
Acanthus Advisers are pleased to release our latest annual review of the European Mid-Market: the 2010 European Mid-Market Fundraising Revew. It is based on our ongoing proprietary research into the European mid-market, covering private equity funds between €100 million and €1 billion.
Here are some of the key messages:
As expected, 2009 was relatively subdued both in terms of deal activity and fundraising with a stronger second half of the year. Despite the slowdown and in the toughest of fundraising conditions, a creditable €7.9 billion was raised by 41 European mid-market funds.
We saw longer fundraising periods reflecting the fundamental change in fundraising conditions for both General Partners and Limited Partners such as fund of funds. In 2009, LPs continued to experience serious liquidity issues as they lacked distributions from their investee funds and their existing commitments remain substantially uncalled. Despite the challenges of fundraising and based on our recent performance analysis, mid-market funds have demonstrated their ability to deliver superior returns to investors compared to large and mega funds (funds above €1 billion).
Expectations for fundraising in 2010 remain low. The key issue continues to be liquidity: distributions are likely to lag behind the pickup in deal activity. This large capital overhang needs to be worked through to see a significant expansion in fundraising activity.
Private equity investors are now screening more closely for superior, operationally driven returns and differentiated strategies by region. As a result, commitment decisions involve more detailed due diligence processes and extensive benchmarking, assessing, inter alia, value creation drivers, risk management and LP/GP alignment of interests.
You will find an electronic version of this year’s mid-market review by clicking on the link below.
more