Almeida Capital, the private equity fundraising advisor, says its research predicts 2006 will exceed last year’s record fundraising level, with an anticipated US$245bn of private equity fund closings globally. Almeida Capital’s global fundraising figures for last year put the amount raised at US$227bn.
US firms are expected to raise US$160bn this year, compared to US$138bn in 2005, although European based firms are expected to raise €56bn, slightly down on 2005’s figure of €60bn.
European buyout funds will, unsurprisingly, continue to dominate by amount of money raised and Almeida Capital predicts that 71% of European fundraisings will be for buyout funds and 50% of the total will be attributable to large buyout funds of over €1bn in size. If, as expected, Permira IV, Cinven IV and Charterhouse come to the market in 2006 and raise a combined total of €20m, this represents some 34% of the total European fundraising market.
The report says: “?the second half of the year will be a much better time for smaller buyouts and other funds as institutional investors get their fill of large buyouts and focus their attention on rebalancing their portfolios.”
The report also notes: “Emerging markets have firmly established themselves on the international LP agenda as investors look to diversify their portfolios. A record $13.9bn was closed during 2005, with over 80% of this sum dedicated to Asia. In line with fundraising activity in the US and Europe, the surge was led by brand name firms raising record-size funds. Three firms along, CVC, JPMorgan and Newbridge, raised funds that accounted for 36% of the total raised for all areas outside the US and Europe.”