European mid-market fundraising saw an impressive rise in 2014, reaching its highest level since 2007, with that buoyant fundraising market expected to continue during 2015.
Funds expected to close in 2015 include exponent Private Equity and Silverfleet Capital, which have both had significant interim closings in recent months.
European mid-market private equity firms raised $16.5 billion in 2014, an increase of 56% on the previous year when just $10.5 billion was raised, according to a new report from placement agent Acanthus Advisers.
Rachel Matharu, a vice president at Acanthus, said that 2014 was an “absolute knock-out year” and added that this year looks set to be another “good year”. Mid-market firms are on the road seeking to raise $29.98 billion across Europe in 2015, although not all of these will close this year.
“It seems like it’s going to be a fairly similar year this year, there are no signs of it slowing down just yet,” she said.
So far this year a number of mid-market firms have made progress with their fundraising. Private Equity News reported in January that Exponent Private Equity reached a first close at roughly $884.88 million for its third fund, and Silverfleet Capital hit a second close at 635.52 million for its latest vehicle. The Silverfleet fund is likely to close in mid-2015.
In March, the private equity arm of Rothschild Merchant Banking, Five Arrows Principal Investments, hit a first close at $522.37 million. Other funds in the market include Danish buyout firm Polaris Private Equity, GMT communications Partners and RJD Partners, according to Preqin and reports in Private Equity News.
Last year, the top-performing region for mid-market fundraising was the UK, where 15 funds raised $7.84 billion. Funds to close included Inflexion Private Equity, which raised $1.55 billion for deals in October, the largest pot of money devoted to UK deals since the financial crisis, and Bowmark Capital, which raised $553.18 million at the start of 2014.
Ms. Matharu said that the U.K. mid-market firms were seeking around $6.36 billion for funds in 2015. She pointed out that there was still strong demand for U.K. mid-market firms from investors, partly because the multiples being paid for deals in the mid-market had not reached the heights that have been seen in the large-cap market.
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