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Private Equity Spotlight

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Private Equity Spotlight Welcome to the latest edition of Private Equity Spotlight, the Private Equity Spotlight monthly newsletter from Preqin providing insights into private equity April 2014 performance, investors, deals and fundraising. Private Equity Spotlight combines information from our online Feature Article products Performance Analyst, Investor Intelligence, Fund Manager Resurgent Europe Profi les, Funds in Market, Secondary Market Monitor, Buyout Deals Analyst This month’s feature article looks at growing interest in Europe in light of increased investor and Venture Deals Analyst appetite and promising fundraising fi gures, as well as the outlook for the year ahead. Page 3 April 2014 Volume 10 - Issue 4 Lead Article FEATURED PUBLICATION: The Troubles of First-Time Funds 2014 Preqin Global Private Equity Although private equity fundraising on the whole has improved in recent years, the aggregate Report capital raised by fi rst-time private equity fund managers is at its lowest level of all time. We analyze historical fundraising statistics and LP appetite for emerging managers. Page 7 2014 Preqin Global Preqin Industry News Private Equity Report This month’s industry news focuses on investor appetite for Europe-focused funds, including LPs that have recently made commitments to vehicles predominantly focused on Europe and those that plan to in the year ahead. Page 11 ISBN: 978-1-907012-62-4 $175 / £95 / €115 www.preqin.com alternative assets. intelligent data. The Facts To find out more and to order your copy please visit: African Private Equity - A look at private equity fundraising in Africa. Page 13 www.preqin.com/gper Investors - LPs with an interest in distressed private equity. Page 14 New York: One Grand Central Place Buyout Deals - Analysis of private equity-backed add-on transactions. Page 16 60 E 42nd Street Suite 630 Venture Capital Deals - We examine venture capital deals in Asia. Page 17 New York, NY 10165 +1 212 350 0100 Performance - A look at the performance of natural resources funds. Page 19 London: Secondaries - A breakdown of secondary market buyers and sellers. Page 21 Equitable House 47 King William Street Conferences - Upcoming private equity conferences around the world. Page 22 London, EC4R 9AF +44 (0)20 7645 8888 You can download all the data in this month’s Spotlight in Excel. Singapore: Wherever you see this symbol, the data is available for free download on One Finlayson Green Excel. Just click on the symbol and your download will begin automatically. You are welcome to use the data in any presentations you are preparing; #11-02 please cite Preqin as the source. Singapore 049246 +65 6305 2200 San Francisco: Free Subscription 580 California Street Suit 1638 Sign up to receive your free edition of Private Equity Spotlight every month! San Francisco CA 94104 www.preqin.com/spotlight +1 415 635 3580 w: www.preqin.com e: [email protected] Twitter: www.preqin.com/twitter LinkedIn: www.preqin.com/linkedin alternative assets. intelligent data. The7thAnnualSuperReturnU.S.2014 WinningStrategiesForMaximisingSuccessful PrivateEquity&VentureCapitalInvestmentInTheU.S. 9Ͳ12June2014,RenaissanceBostonWaterfrontHotel ReaderOfferͲ15%Discount–quoteVIPCode:FKR2362PRQSP WewillbeinBostonforthisyear’sSuperReturnU.S.eventandaredelightedtoofferSpotlightreadersa special15%discountshouldyoubeplanningtoattend. Afterthephenomenalsuccessofthe2013event,withover500delegatesincluding170LPs,wewillbring evenmoreinͲdepthdiscussionandeventmorelocalandinternationalLPstoBostonin2014. The2014conferencewillfeaturethemostpressingissuesintheindustryaswellasonlytheverybestLP& GPspeakers.Withmaximizingfundraisingsuccess,generatingalpha&drivingreturnsacrossPE&VC strategies,therehasneverbeenamoreimportanttimetoattend. Kindestregards MarkO’Hare Forallbookings&enquiries,pleasecontacttheSuperReturnU.S.2014Team QuoteVIPCode:FKR2362PRQSPforyour15%discount Tel:+44(0)2070177200 Email:[email protected] Web:http://www.superreturnus.com/FKR2362PRQSP Feature Article Resurgent Europe Download Data Resurgent Europe Jessica Duong takes a look at growing interest in Europe as a prime private equity investment destination in light of increased investor appetite and promising fundraising figures, and considers the outlook for the year ahead. In the last six to 12 months, there has been a certain shift in the other regions outside of North America and Europe recorded a six private equity landscape resulting in a real buzz surrounding percentage point increase in the same time period. Unsurprisingly, Europe, a region that was faced with notably negative investor almost three-quarters (73%) of the Europe-based LPs we spoke sentiment last year. A multitude of factors may have contributed to as a part of Preqin’s biannual survey of over 100 investors to this, but what is undeniable is the recent ramping up of private indicated that they had appetite for private equity prospects in their equity activity and interest focused on the continent, as evidenced own continent. Preqin’s Investor Intelligence currently tracks 2,662 by Preqin’s statistics on fundraising, deals and investor appetite. active private equity investors that have a preference for European opportunities. These LPs collectively have $65.5tn of assets under Europe has historically been a major market in the private equity management. universe, both in terms of the numbers of private equity fund managers basing their operations there, and its status as a major Fundraising and Performance investment destination for investors. Following the economic turmoil endured by the region as 2008’s global fi nancial crisis Private equity fundraising in Europe has been increasing year on triggered a signifi cant decline in the GDP of the majority of the year since 2010, with more and more capital being raised with a European economies, the continent saw the onset of the sovereign primary focus on European investment opportunities. Fig. 2 shows debt crisis in 2009. The latter in particular threatened the collapse the upticks in aggregate capital raised annually since 2010, with a of economies in the south of the continent, most notably Portugal, regional breakdown by the primary geographic focus of the private Italy and Spain. Ireland and Greece also suffered signifi cantly, and equity fund. 2013 saw $112bn of total capital secured by all funds the general confi dence across Europe as a whole tumbled. predominantly targeting Europe; 44% of this was placed in funds that have a multi-regional focus within Europe, and another 44% Five years on, Europe’s economic picture has brightened, and was specifi cally for investment in Western European opportunities. in the private equity realm the effects of this are refl ected in the The next largest proportion of capital (9%) is intended for the Nordic marked shifts seen in investor confi dence and the upward trends region and the remaining 3% is destined for Central & Eastern of European fundraising activity in recent years. Europe and Southern Europe. Investor Appetite Fig. 3 shows the PrEQIn Private Equity Index by primary geographic focus of private equity funds. The PrEQIn Quarterly Index captures Fig. 1 shows the increase observed in investor appetite for Europe- the return earned by investors on average in their private equity focused fund opportunities from LPs based around the world. portfolios, based on the actual amount of money invested in private There is a consistent pattern of increase across investors based equity partnerships. It shows that since 2004, Europe-focused in North America, Europe, and Asia and other regions around the vehicles have consistently generated higher returns than their world each year. North America has seen the biggest surge in Asia- or North America-focused counterparts, and as of 30 June investor interest for Europe-focused private equity vehicles, with 2013, was recording an index return of 470.8, compared to 339.7 just 27% of investors surveyed by Preqin in December 2012 citing for Asia-focused funds and 223.7 for North America-focused funds. Europe as an attractive region for investment, compared to 60% of LPs we interviewed in December 2013. LPs based in Asia and Fig. 1: Proportion of Investors that Find European Investment Fig. 2: Annual Europe-Focused Fundraising by Primary Opportunities Attractive by Investor Location Regional Focus, 2008 - 2013 80% 180 72% 73% 160 9.9 70% 13.1 140 8.9 60% 60% Dec-11 120 3.1 49% 54.7 10.0 50% 100 3.3 5.1 0.7 2.1 3.2 80 7.1 40% 38% Dec-12 8.0 4.2 49.2 60 1.3 3.6 30.1 32% 37.5 2.4 3.6 30% 27% 3.4 40 81.6 22.4 26.7 21% Dec-13 19% 20 50.4 49.3 20% 38.9 29.9 33.3 Proportion of Respondents Aggregate Capital Raised ($bn) 0 10% 2008 2009 2010 2011 2012 2013 0% Year of Final Close North America Europe Asia & Rest of Multi-Regional Western Europe World Southern Europe Nordic Investor Location Central & Eastern Europe Source: Preqin Investor Interviews, December 2013 Source: Preqin Funds in Market 3 Private Equity Spotlight / April 2014 © 2014 Preqin Ltd. / www.preqin.com Feature Article Resurgent Europe Download Data Regional Breakdowns External Factors In reality, Europe is a blanket term for a collection of fairly disparate It is worth noting that the draws to be found in Europe are not the sub-regions that have their own economic conditions and unique only factors to take into account when considering the resurgence private equity landscapes. Europe’s most developed private equity of investor interest in the region. Activity (or lack of it) in geographies industries are to be found in Western Europe
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