Chart of the week: US closed-ended fund managers target European investments

Managers of closed-ended private equity funds based in the United States are raising increasingly more capital to invest into Europe


Click here for a larger version

US investor interest in the European market has been driven forward by expensive US assets and a favourable exchange rate, as reported by Private Equity International this week. With US funds now targeting more European assets, PEI’s Research & Analytics has looked at how US fund managers have invested into European-focused private equity vehicles since 2010.

At the end of Q3 2015, $12.24 billion has been raised by US fund managers for closed ended private equity vehicles investing into the European market. With one quarter of the year still to go, this equates to a 49 percent increase on aggregate capital raised in 2014. By year end, 2015 is on course to become the highest post-crisis fundraising year for United States-domiciled funds investing into the region, already just $129.59 million below total capital collected in 2012.

As capital gathered has increased, the number of vehicles closed has fallen. Just seven fund closes are responsible for aggregate capital gathered so far in 2015. The average size of vehicles has therefore risen, meaning that in 2015 European-focused private equity vehicles raised by US managers have an average size of $1.75 billion. This figure is higher than in any year since the financial crisis, including 2008 when vehicles raised $1.68 billion on average.

The largest European-focused private equity fund raised by a United States-based manager to have held a final close in 2015 is Carlyle Europe Partners IV. At final close in July 2015, the vehicle had gathered $4.19 billion from investors. Ares Management’s European Loan Programme and Rhône Group Fund V are also notable fund closes, having collected $3.35 billion and $2.9 billion respectively.