European PE Breakdown - 1Q 2019 - PitchBook
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European PE Breakdown 1Q 2019
Contents Credits & Contact
PitchBook Data, Inc.
Introduction 2
John Gabbert Founder, CEO
Adley Bowden Vice President,
Overview 4-5
Market Development & Analysis
Deals by sector and size 6
Content
Spotlight: Take-privates 7-8 Wylie Fernyhough Senior Analyst, PE
Stephen-George Davis Analyst, PE
Exits 9-10 Darren Klees Data Analyst II
Fundraising 11-12 Contact PitchBook
Research
reports@pitchbook.com
Cover design by Caroline Suttie
Click here for PitchBook’s report
methodologies.
Introduction
European PE deal activity saw a notable decline IPOs in the quarter. Instead, GPs continued turning
following the record-setting deal value in 2018. to secondary buyouts (SBOs), which accounted for
However, many GPs took advantage of lower prices in a majority of exits in the quarter, as seen for the first
public equity markets to secure attractively priced take- time in 2018. The steadier atmosphere seen throughout
privates, which are expected to close later in the year. 1Q should entice GPs that delayed selling, potentially
Additionally, bolt-ons and software deals were standout pushing exit activity in later quarters above 1Q’s
areas driving buyout activity. Both accounted for record showing.
proportions of deal count in 1Q and will likely continue
gaining share. Software was especially noteworthy, Fundraising activity, meanwhile, was robust, driven by
nearly trebling its share in five years. VCs and software a flurry of middle-market-focused vehicles. This ran
executives alike now view an exit to PE firms in a counter to the trend of late that saw mega-funds driving
more favorable light thanks to PE firms evolving their fundraising levels. The lone mega-fund to close was in
ownership strategy for software companies, likely France, which saw several massive funds close in 1Q.
leading to more future deals. The mounting levels of Looking forward, with multiple mega-funds (€5 billion+)
dry powder and constant competition for deals helped currently in the market, fundraising figures look poised
keep EV/EBITDA multiples elevated. These high levels of to continue their healthy pace throughout the year.
competition in addition to continued low interest rates
also mean LBO multiples are likely to continue closing in
double-digit territory.
Exits experienced a similar dip, likely because GPs are Wylie Fernyhough
waiting for public equity prices and debt markets to Senior Analyst, PE
rebound after the declines seen at the end of 2018.
Despite a recovery in public equity markets and a
generally stable environment, there were no PE-backed
2 P I TC H B O O K 1 Q 2019 E U R O P E A N P E B R E A K D OW NMentor entrepreneurs Create investment thesis Map alternative exits Find the next Spotify (no pressure) Succession planning Fundraise from EIF? Fundraise outside EIF Thinking 10 steps ahead? So are we. Scale globally Stay competitive PitchBook is a financial data provider covering the global venture capital, private equity and public markets. We offer insight and analysis that help you plan your next steps and then cross them off your list. Impress limited partners Request a free trial at pitchbook.com
Overview
PE deal activity
3,893
3,767 3,740
3,580
3,297
2,861 2,841
2,726
2,450
1,767
€65.7
€416.6
€439.1
€310.9
€414.1
€334.3
€176.1
€205.6
€191.6
€226.4
€81.0
674
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019*
Deal value (€B) Es�mated deal value (€B) Deal count Es�mated deal count
Source: PitchBook | Geography: Europe
*As of March 31, 2019
European PE deal activity slowed in 1Q 2019 after The enduring ascension of bolt-ons is a continuation of
2018’s record showing. The first quarter saw GPs close a trend that began over a decade ago. It is also likely
on 674 deals valued at €65.7 billion—YoY declines of one reason PE bids have remained competitive with
26.8% and 34.2%, respectively. The fall in deal value was strategics. In fact, GPs have been outbidding corporates
attributable to the lower count as well as the downtrend in recent years.1 Strategics can typically justify a high
in mega-deals (€1 billion+). Just three mega-deals purchase price due to expected synergies, but research
closed in 1Q 2019, the lowest figure in three years. In 4Q indicates that through the bolt-on strategy, PE firms can
2018, pricing for leveraged loans and high-yield bonds— price in expected synergies and are able to capture at
typically used to finance LBOs—dipped, which meant least some of these anticipated synergies, allowing them
financing costs were overly burdensome during much to bid competitively with corporates.
of the quarter, and many PE firms postponed deals
as a result. A similar decline in public markets, while In addition to bolt-ons, buyouts in the software space
depressing mark-to-market pricing, created take-private have been driving European PE activity. During the
prospects, however. Several PE firms pounced on the quarter, software accounted for 15.4% of deals, nearly
opportunity in 1Q as credit markets thawed, securing three times higher than the 5.6% seen in full-year 2014.
deals such as the €3.0 billion take-private of satellite This surge in software deals is due to myriad factors,
telecommunications company Inmarsat. but chief among them is performance. The pooled gross
multiple of invested capital for technology buyouts
While deal count and value lagged previous quarters, between 2009 and 2015 has outperformed all sectors
bolt-on activity continued heating up. During the other than healthcare.2 These hefty returns stemmed
quarter, bolt-ons accounted for over 55% of deal from high organic growth rates, which appear set to
count, the highest on record, though with nine continue. Gartner predicts that in 2019, the SaaS market
months remaining in 2019, these figures could move will grow by 16.2%3 while worldwide IT spending will
meaningfully by year end. Although bolt-ons tend rise at just 1.1%.4 To glean the most from these buyouts,
to be smaller than the median deal size, the bolt-on PE firms have had to rethink the PE playbook when
acquisition of payments company Concardis was the it comes to software, looking to growth rather than
largest deal to close in 1Q. The company was acquired simply cost cutting. After Cvent, an enterprise software
by competitor Nets just months after the firm was company, was acquired by Vista Equity Partners for $1.7
bought out by a Hellman & Friedman-led consortium, billion in 2016, its CEO and founder, Reggie Aggarwal,
creating a payments powerhouse.
1: “Private Equity: Tech’s Best Kept Secret,” Victor Basta, Financial Times, January 7, 2019
2: “Global Private Equity Report 2019,” Bain & Company, 2019
3: “Gartner Forecasts Worldwide Public Cloud Revenue to Grow 17.3% in 2019,” Gartner, September 12, 2018
4: “Gartner Says Global IT Spending to Grow 1.1% in 2019,” Gartner, April 17, 2019
4 P I TC H B O O K 1 Q 2019 E U R O P E A N P E B R E A K D OW NOver view
said, “You don’t pay that kind of premium and then Proportion of PE deals targeting
squeeze it for a profit.” Rather, PE firms must continually
software companies
reinvest in the company.
18%
In light of these changes, VCs and software CEOs are
16% 15.4%
coming around to the option of exiting to PE. In a post
on Madrona Venture Group’s website, the managing
14%
director, Matt McIlwain, wrote, “New PE owners offer a
high degree of autonomy and flexibility to executives 12% 11.2% 10.8%
who are meeting or exceeding agreed-to milestones
(admittedly with greater EBITDA emphasis over 10%
growth), as well as additional capital to take advantage
of strategic opportunities.”5 In another example of the 8% 7.5%
changing attitudes toward software buyouts, Jason
Lemkin, a SaaS founder, described selling to PE firms 6%
as “a wonderful third option for liquidity.”6 As founders
and their investors become more comfortable exiting to 4%
PE firms, this option is likely to become more frequent,
2%
further propelling software PE deal activity.
0%
Looking to the rest of the year, software deals ought to 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019*
continue gaining share in PE activity. Two of the largest
announced PE deals yet to close are technology deals, So�ware % of PE (€B) So�ware % of PE (#)
including the €5.7 billion take-private of Germany-based
Source: PitchBook | Geography: Europe
online marketplace Scout24 and the $2.0 billion (£1.6 *As of March 31, 2019
billion) take-private of UK-based online travel company
Travelport. European regulation may also be fostering
the next generation of software targets. Laws such as PE buyout EV/EBITDA multiples (four-
the recently enacted GDPR, while a hindrance to most quarter rolling median)
businesses, are creating opportunities for software firms
12x
in the bourgeoning fields of data tracking, protection,
and management.7
10x
While many of the deals to close this quarter were
5.6x
priced in 4Q 2018—when public equities were expected 5.6x
3.7x
8x
4.7x
to put downward pressure on pricing—multiples
4.4x
4.9x
4.4x
4.1x
3.5x
3.9x
4.1x
3.3x
3.9x
3.9x
remained aloft during the quarter. Looking at the last
four quarters, the median European buyout multiple
6x
was 11.5x, the highest figure on record. During the
quarter, several deals closed above 10x, including
the €200 million buyout of beverage dispensing
4x
equipment manufacturer Celli by Ardian and the
6.1x
5.9x
5.7x
5.7x
5.6x
5.6x
5.6x
5.6x
company’s management, which closed at 11.8x. Such
5.5x
5.4x
5.4x
5.3x
5.2x
5.2x
elevated pricing has led to firms loading up on debt 2x
and aggressively making pro-forma adjustments to
rationalize the buyouts. Jonathan Lavine, co-managing
partner at Bain Capital, reportedly called attention to 0x
these trends, arguing that PE firms are accumulating too 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
much debt in the competition to secure deals. However, 2016 2017 2018 2019*
the European Central Bank’s prolonged low interest-rate Debt/EBITDA Equity/EBITDA EV/EBITDA
policy, which is leading to depressed credit costs, means
highly levered transactions are here to stay, at least for Source: PitchBook | Geography: Europe
*As of March 31, 2019
the time being.
5: “How VC-to-PE Buyouts Can Change Market Dynamics for Later-Stage, VC-Backed Companies,” Madrona Venture Group, Matt McIlwain
6: “The Rise of Private Equity in SaaS: A Gift to Founders,” SaaStr, Jason Lemkin, October 4, 2017
7: “PE Firms Seeking Software,” Lincoln International, William Bowmer & Scott Twibell, October 2018
5 P I TC H B O O K 1 Q 2019 E U R O P E A N P E B R E A K D OW NDeals by sector and size
PE deals (€) by sector PE deals (#) by sector
100% B2B 100% B2B
90% 90%
B2C B2C
80% 80%
70% 70%
Energy Energy
60% 60%
50% Financial 50% Financial
services services
40% 40%
30% Healthcare 30% Healthcare
20% 20%
IT IT
10% 10%
0% 0%
Materials Materials
2018
2016
2017
2014
2015
2011
2012
2013
2009
2010
2019*
2018
2014
2015
2016
2017
2009
2010
2011
2012
2013
2019*
& resources & resources
Source: PitchBook | Geography: Europe Source: PitchBook | Geography: Europe
*As of March 31, 2019 *As of March 31, 2019
PE deals (€) by size PE deals (#) by size
100% €2.5B+ 100% €2.5B+
90% 90%
€1B- €1B-
80% 80%
€2.5B €2.5B
70% 70%
60% €500M- 60% €500M-
€1B €1B
50% 50%
40% €100M- 40% €100M-
€500M €500M
30% 30%
20% €25M- 20% €25M-
€100M €100M
10% 10%
0% Under 0% Under
2017
2018
2017
2018
2015
2016
2015
2016
2013
2014
2011
2012
2011
2012
2013
2014
2009
2010
2009
2010
2019*
2019*
€25M €25M
Source: PitchBook | Geography: Europe Source: PitchBook | Geography: Europe
*As of March 31, 2019 *As of March 31, 2019
6 P I TC H B O O K 1 Q 2019 E U R O P E A N P E B R E A K D OW NSpotlight: Take-privates
Take-privates (#) as proportion of overall PE deal activity
5%
4%
3%
2%
1% 0.8% 0.8%
0%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: PitchBook | Geography: Europe
This section was published separately as an analyst assets, among other factors, has caused a paradigm shift
note, written by Senior PE Analyst, Wylie Fernyhough, whereby private market multiples have approximated
on April 8, 2019. public markets for nearly a decade. This presents PE
firms with a massive opportunity. Pockets of downward
Introduction volatility—similar to what we saw in 4Q 2018—can cause
public companies to drop by 20% or more in a quarter.
Take-private buyouts have been declining as a portion These moments of price weakness present an opening
of overall deal activity for nearly two decades. In for PE firms, and many seized the opportunity.
2018, these deals accounted for 0.8% of deal flow in
Europe. However, the number of take-privates has held Take-privates are also tending to focus on technology
relatively steady as the count of non-take-privates has companies, evident by the recent Scout24 and Travelport
ballooned. Interestingly, these deals now account for buyouts. The sector accounted for 42.5% of take-private
a higher portion of deal value than 15 years ago as the deal value between 2016 and 2018. These buyouts are
size of take-privates has dramatically outpaced non- happening sooner in a company’s public life as well.
take-privates during that time. In a recent example, cloud-based Apptio was barely
public for two years before Vista Equity Partners took
While the count of take-privates may be level with the company private in a $1.9 billion buyout in 2018.
the figures of 15 years ago, some structural changes The median number of years since the public listing of
are underway in the PE industry that we believe will take-private targets fell from 15.5 years in 2015 to 8.5
boost the number of take-privates in the coming years in 2018. In some cases, PE firms are not waiting for
years. Public markets in Europe offer fertile hunting companies to go public, instead acquiring them while still
ground for billion-dollar-plus buyouts that allow GPs VC-backed or in IPO registration.
to spend down dry powder and begin earning fees on
uninvested capital. To note, PE mega-funds in North Performance
America and Europe have $328.3 billion in dry powder
as of 2Q 2018 and are seeking deals sizable enough to While they can be compellingly priced, take-privates
move the needle on called capital; this is nearly double present certain unique risks of which GPs need to be
the sum of dry powder just four years prior. aware and for which they are (hopefully) compensated.
Looking at exits of take-privates over the past three
Opportunities full years, we see these buyouts are more than twice
as likely (12.1% versus 5.2%) to go bankrupt or out
For many years, public companies traded at a premium of business when compared to similarly sized non-
to their private market counterparts. This was mostly take-privates. In addition to the deleterious impact
due to liquidity preferences and the increased visibility bankruptcies can have on fund performance and
into financials. Heightened competition for private stakeholders, bankruptcies reflect negatively upon
7 P I TC H B O O K 1 Q 2019 E U R O P E A N P E B R E A K D OW NSpotlight: Take - privates
Take-privates and non-take-privates (#) by exit type (2016-2018)
Non-take-private over
43.8% 36.5% 14.6% 5.2%
$500M
Non-take-private under
51.0% 38.4% 3.8% 6.8%
$500M
Take-private 42.3% 37.4% 8.2% 12.1%
0% 25% 50% 75% 100%
SBO M&A IPO Bankrupt/out of business
Source: PitchBook | Geography: North America & Europe
the GP, potentially causing reputational damage and Median annualized change in EV for
making future fundraising efforts more challenging.
take-privates and non-take-privates by
One explanation for the higher rate of bankruptcy
in take-private deals is that to afford these massive exit year
buyouts, PE firms employ greater amounts of leverage. 40%
Lenders are often willing to boost leverage given the
35.5%
lower levels of perceived risk and added levels of 35%
financial insight that can be gleaned from years of
public filings. However, given the higher bankruptcy 30%
rates, this line of thinking appears flawed.
25%
19.8%
The most important question as it pertains to 20% 18.0%
performance, however, is if GPs are being compensated
for this additional downside risk through higher returns. 15%
Overall, we find the answer to be that performance—
as measured by the annualized change in EV over the 10%
holding period—shows a discernible benefit for take- 6.6% 5.1%
5%
privates compared with non-take-privates of a similar
3.7%
size (over $500 million). One reason for this could be 0%
that GPs are able to act when price dislocation occurs, 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
securing buyouts at more attractive prices than would -5%
be available in private markets. These findings may
-10%
also give credence to the belief that public companies Take-private
are overly focused on short-term thinking and become Non-take-private under $500M
inefficient, allowing an actor with a longer-term focus to Non-take-private over $500M
step in and realize untapped value.
Source: PitchBook | Geography: North America & Europe
Conclusion
consider altering the mix of financing— favoring equity—
to derisk the acquisition and hopefully avoid bankruptcy.
In summary, take-privates suffer a higher level of
Since take-privates present opportunities to spend down
bankruptcy or going out of business but show
heaps of dry powder at reasonable valuations, we believe
measurable upside, as compared to similarly sized non-
the coming years will see a rise in take-private activity.
take-privates, to justify this risk. When looking at take-
We will have to watch performance closely as the recent
privates as a source of deal flow, GPs ought to have a
flood of high-profile technology take-privates are exited
clear value-creation plan laid out. Additionally, GPs may
and see how returns stack up.
8 P I TC H B O O K 1 Q 2019 E U R O P E A N P E B R E A K D OW NExits
PE exit activity
1,400
1,315
1,279
1,176
1,079
966 1,099
859
739
518
€29.2
€259.9
€294.4
€253.0
€199.4
€256.7
€307.2
€137.7
€202.3
€131.5
€45.2
139
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019*
Exit value (€B) Exit count
Source: PitchBook | Geography: Europe
*As of March 31, 2019
In 1Q 2019, PE exit activity decreased significantly, PE exits (€) by type
totaling €29.2 billion across 139 transactions—declines
of 50.1% and 52.7% YoY. While first-quarter declines 100% SBO
in exit activity can be seen across all deal types,
90%
SBOs continue to account for the majority of exits.
Since 2009, SBOs have consistently increased their IPO
80%
proportion of exits, lifting their share in all but three
years. By contrast, the number of exits via corporate 70% Corporate
acquisition has fallen for the last three years and
acquisi�on
seems on track to continue its current downswing. In a 60%
similar vein, there were zero PE-backed IPOs in the first
quarter, as GPs waited for year-end volatility to subside 50%
before listing portfolio companies.
40%
In addition to broader public market volatility, the
lack of 1Q IPOs can be attributed to multiple factors, 30%
including but not limited to geopolitical concerns, trade
issues and potential economic headwinds in Europe. It
20%
was not only PE-backed companies that delayed IPOs in
10%
the quarter. Volkswagen postponed the IPO of its truck
unit, Traton SE, which was anticipated to be Europe’s
0%
largest IPO of 2019, citing “weak market conditions.”
2017
2018
2014
2015
2016
2012
2013
2009
2010
2011
2019*
2019 has given way to Europe’s slowest IPO market
since 2009, the height of the financial crisis. However,
Source: PitchBook | Geography: Europe
the rest of the year has some hopeful prospects, *As of March 31, 2019
with expected offerings from other large PE-backed
companies, such as Moscow-based Sibur Holding and
London-based Global Switch Holdings, which gives the
rest of the year a more sanguine outlook.
9 P I TC H B O O K 1 Q 2019 E U R O P E A N P E B R E A K D OW NE xits
The drop in exit value can also be credited to a lack PE exits (€) by size
of larger exits, continuing a trend from 2018. 1Q 2019
recorded only one exit in the €2.5 billion+ bucket, the 100% €2.5B+
sale of Spain-based sports management and marketing
90%
company, Dorna Sports, which is most recognized for
owning the commercial and television rights for the €1B-
80%
motorcycle racing world championship Grand Prix €2.5B
(MotoGP). The company’s story is indicative of PE firms 70%
wanting to “hold onto their winners.” Bridgepoint Advisers
60% €500M-
purchased Dorna in a €345.0 million SBO from CVC
€1B
Capital Partners in 2006, after which Bridgepoint sold a
39% stake to the Canada Pension Plan Investment Board 50%
(CPPIB) for $518.0 million in 2012. After a growth round €100M-
40%
in 2013, and several dividend recapitalizations along the €500M
way, Bridgepoint sold the company to itself, transferring 30%
ownership to one of its newer flagship funds. It should
also be noted that various PE firms were interested in the 20% €25M-
asset, some of which even submitted preliminary bids €100M
after Lazard bankers were appointed to explore a sale. 10%
Bridgepoint used these bids to calculate a “fair” sale price.
0% Under
We anticipate these types of GP “self-sales,” especially of
2019*
2017
2018
2015
2016
2012
2013
2014
2009
2010
2011
portfolio companies with relatively strong performance, €25M
to continue in the near term as GPs attempt to hold onto
Source: PitchBook | Geography: Europe
coveted assets beyond the typical PE fund lifespan as a *As of March 31, 2019
means to navigate anticipated uncertainty.
IT has seen a spike in exit count from 12.6% in 2018 to PE exits (#) by sector
18.7% in 1Q, which is not wholly unexpected given the 100% B2B
increases in deal activity within the sector in the past
few years, specifically in software. One of the more 90%
notable IT exits in 1Q was of Denmark-based KMD B2C
by Advent International. KMD, which offers software 80%
services to local and central governments as well
70%
as the private sector, was initially purchased from Energy
Local Government Denmark, an association of the
60%
98 municipalities in Denmark, in an LBO by an EQT-
led consortium in 2009 for $335.2 million (DKK 2.0 50% Financial
billion and €267.8 million). Three years later, in 2012, services
the company was again exited via SBO by another 40%
consortium for an undisclosed amount. In 1Q 2019,
KMD was sold to NEC Corporation for €1.2 billion to 30% Healthcare
help expand NEC’s business from northern Europe
20%
into the majority of European countries. This is one
example of why software and IT companies have come IT
10%
to comprise a larger portion of deals and exits in the
last few years, as they are scalable assets which often 0%
Materials
2019*
appreciate rapidly. We expect to see more exits in this
2017
2018
2015
2016
2013
2014
2009
2010
2011
2012
& resources
vein moving forward.
Source: PitchBook | Geography: Europe
*As of March 31, 2019
10 P I TC H B O O K 1 Q 2019 E U R O P E A N P E B R E A K D OW NFundraising
PE fundraising activity
112 111
107
103 105
101 98
95
91
72
32
€67.4
€25.7
€64.8
€79.6
€43.7
€50.4
€37.3
€26.7
€55.7
€38.3
€20.6
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019*
Capital raised (€B) Fund count
Source: PitchBook | Geography: Europe
*As of March 31, 2019
Fundraising in 1Q 2019 came in strong with €25.7 billion PE fundraising (€) by size
raised across 32 funds. This increase was largely due to
100% €5B+
healthy fundraising activity for larger France-based funds,
namely in the €1 billion to €5 billion bucket. Additionally
90%
three €1 billion-plus growth funds closed in the quarter,
€1B-
buoying fundraising gains. These substantial increases are 80% €5B
significant, considering they take place concurrently with
vast reductions in fundraising in the UK due to uncertainty 70%
around Brexit. That said, there is at least one $10 billion fund €500M-
based in the UK likely to close this year, which would alter 60% €1B
fundraising figures drastically.
50%
While GPs have been raising ever larger funds (noted by €250M-
40%
the sizable increase in median fund size in 1Q), only one €500M
mega-fund closed in this quarter, a €6 billion buyout fund 30%
from Paris-based Ardian. However, there are multiple
European mega-funds currently open and expected to close 20% €100M-
sometime during the year, indicating that the trend toward €250M
a swelling number of mega-funds remains intact. Two such 10%
examples are Apax X, a $10 billion buyout fund based in
London,8 as well as Permira VII, a €10 billion buyout fund 0% Under
2019*
€100M
2017
2018
2015
2016
2013
2014
2009
2010
2011
2012
based in Frankfurt. Vehicles in the €1 billion-€5 billion bucket
comprised nearly half of total capital raised at 48.6%, putting
Source: PitchBook | Geography: Europe
2019 on pace to have the highest proportion of capital raised
*As of March 31, 2019
in this range since 2008. Interestingly, four of the seven funds
raised in this size bucket were growth funds.
of the funds raised in Europe. We believe that this trend is
driven by two primary factors: a meteoric rise in software
Growth funds have become more prevalent in Europe,
investments and a demand for earlier stage companies
encompassing 23.1% of fundraising value in 1Q, higher than
after a decade of slow growth in the region. We believe the
any full-year figure since 2011. Furthermore, growth funds
mounting interest in growth investments will continue so
have been consistently accounting for a swelling portion
long as market conditions in Europe remain stable.
8: Although Apax is based in London, its funds are denominated in USD.
11 P I TC H B O O K 1 Q 2019 E U R O P E A N P E B R E A K D OW NFundraising
PE fundraising (€) by region PE fundraising (€) by type
100% UK & 100% Other
Ireland
90% 90%
PE growth/
80% 80%
Southern expansion
Europe
70% 70%
60% 60% Mezzanine
Nordics
50% 50%
Buyout
40% DACH 40%
30% 30%
France &
20% Benelux 20%
10% 10%
Central &
0% Eastern 0%
2019*
2019*
2016
2017
2018
2014
2015
2012
2013
2009
2010
2011
2017
2018
2015
2016
2012
2013
2014
2009
2010
Europe 2011
Source: PitchBook | Geography: Europe Source: PitchBook | Geography: Europe
*As of March 31, 2019 *As of March 31, 2019
Counterintuitively, the average time to close a buyout fund Median PE fund sizes (€M)
has been decreasing since 2017 while the average time to
€600
close all PE funds has risen over the same time period. This
may be due to LP apprehension over investing in a relatively €507.5
newer strategy, growth funds, juxtaposed with the familiarity €500
of investing in a buyout fund with a laudable track record. Of
the 11 growth funds raised in the quarter, the UK raised four €425.0
of them, which is notable given the region’s diminished role €400
in fundraising in the last few years.
€295.0
In 1Q, the France & Benelux region accounted for 48.3% of €300
total capital raised across Europe. Fundraising in France €270.1
was especially strong with the aforementioned Ardian LBO
€200
Fund VII as well as Astorg Partners’ Astorg VII, both based
in Paris. The Astorg VII fund, which closed in January at €4
billion, represented a near 100% step-up from its €2.1 billion
€100
buyout fund closed in 2016. The firm tends to invest in
global B2B niche market leaders with an EV range of €200
million to €1 billion. Astorg focuses on a limited number of €0
portfolio companies in a single fund to maximize gains from 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019*
its investment. However, this hyper-concentrated method of
holding companies can lead to varied returns. For instance, Buyout Funds All PE Funds
Astorg’s 2007 fund Astorg IV is a top-quartile performing Source: PitchBook | Geography: Europe
*As of March 31, 2019
fund, but its subsequent fund, 2011 Astorg V, is a bottom-
quartile performing fund. Given that Brexit has been delayed
another six months, the coming quarters will help inform
us which regions address the gaps in fundraising stemming
from the UK’s likely decline in commitment figures.
12 P I TC H B O O K 1 Q 2019 E U R O P E A N P E B R E A K D OW NCOPYRIGHT © 2019 by PitchBook Data, Inc. All rights reserved. No part of this publication may be reproduced in any form or by any means—graphic, electronic, or mechanical, including photocopying, recording, taping, and information storage and retrieval systems—without the express written permission of PitchBook Data, Inc. Contents are based on information from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. Nothing herein should be construed as any past, current or future recommendation to buy or sell any security or an offer to sell, or a solicitation of an offer to buy any security. This material does not purport to contain all of the information that a prospective investor may wish to consider and is not to be relied upon as such or used in substitution for the exercise of independent judgment.
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