The volume of investment in the first half of 2009 plunged 65% from the previous six month period, while fundraising grew 18%, according to the latest data from EVCA.
In Q2 of 2009 the number of companies receiving private equity investment was down by 8% from the first quarter of this year, while the amount invested fell to €3.9bn.
Buyout investment also fell by 14% to €1.6bn in Q2 while growth capital plummeted by almost half to €622m and venture capital fell by a quarter to €728m.
Replacement capital more than doubled this year, driven by a small number of larger deals. Small and mid-market buyouts also rallied in the second quarter, up 24% to €1.3bn. The small and mid market now account for four fifths of all buyouts by value, up from two thirds in the same period of last year.
In terms of fundraising, buyout funds led the way with an increase of 28% on the first quarter to €1.9bn. However total funds raised in the first half of the year are down 86% from the same period of 2008.
Pricing is also down in 2009 as the cost of assets sold by private equity firms fell by more than half from the first quarter, to €912m, although the number of companies exited fell by only 15%.
Javier Echarri of EVCA spoke with EVCJ and said: “We should not jump to any optimistic conclusions. The improvement is still low compared with other years as there is still a cash flow strain. I have not seen any signs that Q3 figures will be any better than Q2.”