A recent report from PitchBook has revealed that only eight first-time private equity funds successfully closed in Europe this year. This marks a significant decline compared to previous years, as emerging fund managers grapple with challenging conditions for raising capital.
To provide some context, in 2021, a total of 46 first-time funds managed to secure a combined €8 billion. However, this figure has sharply declined over the subsequent years. In 2022, only 21 funds managed to raise €2.5 billion, and in the current year, a mere eight funds secured €1.2 billion in total.
While fundraising has been an uphill battle, established and larger fund managers have continued to attract capital. PitchBook analysts anticipate that fundraising levels in Europe for 2023 will surpass those of 2022.
During the first half of 2023, private equity funds collectively raised €49 billion across 51 different vehicles. Notably, the eight first-time funds that achieved successful closures all had specific investment focuses. Among them, four were centered on specific countries, which allowed them to appeal to investors with specialized mandates, as opposed to the more generalist approach favored by larger funds, according to PitchBook.
These successful first-time funds included the Banijay UK Growth fund, which targeted media production assets, the Zintinus Fund I, focused on foodtech, and the Sycamore Buyout Fund I in Hungary, which concentrated on life sciences.