Goldman, CVC trump fundraising records

The private equity fundraising juggernaut rolled on this week as CVC Capital Partners trumped BC Partners to raise Europe’s largest buyout fund, and GS Capital Partners edged ahead of Carlyle to claim the world’s largest vehicle so far.

CVC is due to close its latest fund at €6bn, while BC Partners held a €5bn first close a few weeks ago and is expected to hold a final close at €5.5bn. GS Capital Partners V has closed at US$8.55bn, slightly ahead of Carlyle’s new US$7.85bn US fund.

Other large buyout funds are in the market and receiving a positive reception, suggesting that fundraising this year is on course to comfortably exceed totals for 2004. Almeida Capital, the private equity placement agent and research group, expects European fundraising to reach €42bn this year, of which some 75% will be contributed by buyout funds.

Other large European buyout funds in the market include Apax at €4bn, PAI at €2.7bn, Bridgepoint at €2.5bn and Advent at €2.5bn.

According to Almeida, the value of final closes in Europe in the first quarter is 33% ahead of the same period last year. European closings were worth €8.6bn in the first quarter compared with €6.5bn in the first three months of 2004.

There were eight final closes of European buyout funds worth €7.1bn in the first quarter, up from €3.5bn in the first quarter of 2004. The record for the first quarter was held by Carlyle Europe II at €1.8bn, followed by Barclays Private Equity at €1.65bn.

The US fundraising total for the first quarter rose 54%, to US$25bn, from US$16.2bn in the same period last year. In that market, 15 buyout funds held a final close for a collective US$15.1bn, up massively from US$1.1bn in the first quarter of 2004.

The year-end total in the US will be boosted by other large-scale funds. In addition to Goldman, Blackstone is on course to raise US$10bn and Warburg Pincus is targeting a fund of US$8bn.

As reported previously in IFRBuyouts, investors are pouring into the private equity asset class, but concerns are mounting in the background as the business goes super size. Strategic bidders and hedge funds may offer fiercer competition for assets in future – although strategics are welcome in the exit sense – and it remains to be seen whether the euphoria in the debt markets can be sustained.

European venture capital fundraising is also recovering this year after the downturn. There were three final closes worth a combined €745m, compared with just one close in the same period last year worth only €66m.