private equity in europe - fundfinanceassociation · 2019-02-23 · • private equity market...
TRANSCRIPT
ChristopherElvinHeadofPrivateEquityProducts,Preqin
2ndEuropeanFundFinanceSymposium,October2016
PrivateEquityinEurope
MarketOverview,LP&GPInsight&Outlook
www.preqin.com
AboutPreqinPrivateEquity&VentureCapital HedgeFunds RealEstate PrivateDebtInfrastructure Natural
Resources
SanFrancisco NewYorkLondon
HongKong
ManilaSingapore
Clientsincludeover44,000industryprofessionalsfrom16,000firms
MulQaward-winningservice
Dataavailableviaonlinedatabases,publicaQonsandresearchreports
www.preqin.com
Content• PrivateEquityMarketOverview
-AUM-Fundraising-Deals/Exits-Performance
• LimitedPartner&GeneralPartnerInsight
-LPsaQsfacQon/intenQons-Challenges-Brexit
• OutlookN.B.‘PrivateEquity’–includesbuyout,venturecapital,growth,fundoffunds,secondariesturnaroundandothercloseyrelatedstrategies.Itdoesnotincluderealestate,infrastructure,privatedebtornaturalresourcestrategies.
www.preqin.com
EuropeanPrivateEquityAUM,1999–2016YTD
45 64 77 69 66 105 136 172 194 195 165 151 148 161 179 174 18759 55 59 89 107116
154
205 173223 280 307
362378 360 390 384
0
100
200
300
400
500
600
700AU
M($
bn)
UnrealisedValue($bn)
DryPowder($bn)
Source:PreqinPrivateEquityOnline
www.preqin.com
Europe-FocusedPEFundraising2006-2016YTD
263281
266
186
158169 163
191207
177
132
106116 116
62
39 4464
81 8273 81
0
100
200
300
400
500
600
700
0
50
100
150
200
250
300
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016YTD
Av.Fun
dSize($
mn)
AggregateCapital($b
n)
No.ofFundsClosed AggregateCapitalRaised($bn) AverageSize($mn)
Source:PreqinPrivateEquityOnline
www.preqin.com
Europe-FocusedFundraisingbyFundStrategy(2006-2016YTD)
725
48
631
421
30969
218 27102 68184 28
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
No.ofFundsClosed AggregateCapitalRaised($bn)
Prop
orQo
nofTotal
VentureCapital Buyout FundofFunds Growth Secondaries OtherPrivateEquity
Source:PreqinPrivateEquityOnline
www.preqin.com
EuropeanDeals2006–2016YTD
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
180.0
200.0
0
200
400
600
800
1,000
1,200
1,400
1,600
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016YTD
AggregateVa
lue(EURbn
)
No.ofD
eals
No.ofDeals AggregateDealValue(€bn)
Source:PreqinPrivateEquityOnline
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
0
500
1,000
1,500
2,000
2,500
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016YTD
AggregateVa
lue(EURbn
)
No.ofD
eals
No.ofDeals AggregateDealValue(€bn)
Buyout Venture
www.preqin.com
EuropeanExits2006–2016YTD
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
0
100
200
300
400
500
600
700
800
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016YTD
AggregateVa
lue(EURbn
)
No.ofE
xits
No.ofExits AggregateExitValue(€bn)
Source:PreqinPrivateEquityOnline
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
0
50
100
150
200
250
300
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016YTD
AggregateVa
lue(EURbn
)
No.ofE
xits
No.ofExits AggregateExitValue(€bn)
Buyout Venture
www.preqin.com
EuropeanFocusedFunds-CapitalCalls/DistribuYons
2014 16
2329
34
46
7063
44
5865
55 5766
71
26
12 10 12 11
3745
49
83
33
23 21
6556
74
101
146
31
0
20
40
60
80
100
120
140
160
Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Mar-16
CapitalCalled/Distrib
uted
($bn
)
Called$bn Distributed$bn
Source:PreqinPrivateEquityOnline
www.preqin.com
MedianNetIRR–NAmerica,Europe,ROW
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
NetIR
Rsin
ceincepQ
on
VintageYear
Europe NorthAmerica AsiaandRestofWorld
Source:PreqinPrivateEquityOnline
www.preqin.com
EuropeanPrivateEquityIRRs–Median&QuarYles
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
NetIR
Rsin
ceincepQ
on
VintageYear
BogomQuarQleIRRBoundary MedianIRR TopQuarQleIRRBoundary
Source:PreqinPrivateEquityOnline
www.preqin.com
LimitedPartner&GeneralPartnerInsight
www.preqin.com
EuropeanLimitedPartnerUniverse–1,650LPs
13%
10%
8%
8%
7%7%6%
6%
6%
6%
6%
5%3%
9%PublicPensionFund
InsuranceCompany
PrivateEquityFundofFundsManager
AssetManager
InvestmentCompany
CorporateInvestor
Bank
WealthManager
FamilyOffice-Single
FoundaQon
FamilyOffice-MulQ
GovernmentAgency
EndowmentPlan
Other
Source:PreqinPrivateEquityOnline
www.preqin.com
LPSaYsfacYonwithPEReturns
3%
18%
80%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Prop
orQo
nofRespo
nden
ts(%
)
Europe-BasedInvestorsGeneralPercepYonofPrivateEquity
PosiQve
Neutral
NegaQve
www.preqin.com
LPs’IntenYons–Short&LongTerm
44%
41%
15%
European-basedInvestorsExpectedCapitalCommitmenttoPrivateEquityFundsintheNext12MonthsComparedtoPast12months
MoreCapital
SameAmountofCapital
LessCapital
47%
45%
8%
European-basedInvestorsPlansforTheirPrivateEquityAllocaYonsintheLongerTerm
IncreaseAllocaQon
RemaintheSame
ReduceAllocaQon
Source:PreqinInvestorInterviews,June2016
www.preqin.com
LPs’ExpectedCapitalCommitments&No.ofFunds
31%
15%38%
4%12%
AmountofFreshCapitalEurope-BasedInvestorsPlantoInvestinPrivateEquityover
theNext12Months
Lessthan$50mn
$50-99mn
$100-349mn
$350-499mn
$500mnorMore
19%
22%
22%
36%
NumberofFundCommitmentsEurope-BasedInvestsPlantoMakeintheNext12Months
1-2Investments
3-4Investments
5-6Investments
Source:PreqinInvestorInterviews,June2016
www.preqin.com
LPInterestvs.FundStrategy
www.preqin.com
LPInterestvs.Region
www.preqin.com
PENetCashFlowstoLPs–NorthAmerica,Europe&ROW
-80.0
-60.0
-40.0
-20.0
0.0
20.0
40.0
60.0
80.0
100.0
120.0
Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15
NetCashFlow
($bn
)
NorthAmerica Europe Asia
Source:PreqinPrivateEquityOnline;NBcashflowistoglobalLPsfromregionalPEindustry
www.preqin.com
GeographicPreferencesofEuroLPstargeYngfundsinthenext12months
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
NorthAmerica Europe Asia-Pacific RestofWorld EmergingMarkets Global
Prop
orQo
nofSearche
sIssue
s(%)
GeographicPreference
Source:PreqinPrivateEquityOnline
www.preqin.com
BiggestChallengesinthenext12months
13%
23%
35%
35%
35%
40%
48%
65%
0% 10% 20% 30% 40% 50% 60% 70%
Governance
Fees
VolaQlity/UncertaintyinGlobalMarkets
DealFlow
RegulaQon
Performance
ExitEnvironment
Pricing/ValuaQons
%ofRespondents
Source:PreqinInvestor&FundManagerSurveys–June2016
11%
14%
20%
21%
24%
24%
31%
41%
58%
0% 10% 20% 30% 40% 50% 60% 70%
PercepQonoftheIndustrybyPublic
FeePressure
DealFlow
ExitEnvironment
Performance
Fundraising
RegulaQon
VolaQlity/UncertaintyinGlobalMarkets
Pricing/ValuaQons
%ofRespondents
EuropeanLPs EuropeanGPs
www.preqin.com
EuropeanLPsPEPorfolioReturnExpectaYonsinthenext12monthscomparedtolast12months
15%
50%
35% WillPerformBeger
WillPerformabouttheSame
WillPerformWorse
www.preqin.com
AlternaYveRoutesintoPE–GrowingImportance
www.preqin.com
LPsviewsonBrexit
www.preqin.com
Europe-FocusedPEQuarterlyFundraising2014-2016YTD
47
5249
59
43
55
36
43 44
53
31
4
14
35
17 16 15 14
2320
30
36
15
10
100
200
300
400
500
600
700
800
900
0
10
20
30
40
50
60
70
Q12014 Q22014 Q32014 Q42014 Q12015 Q22015 Q32015 Q42015 Q12016 Q22016 Q32016 Q42016
AverageFund
Size
($mn)
AggregateCapital($b
n)
No.ofFundsClosed AggregateCapitalRaised($bn) AverageSize($mn)
Source:PreqinPrivateEquityOnline
www.preqin.com
GPsviewsonBrexit
www.preqin.com
KeyTakeaways/Outlook• EuropeanPEinrobusthealth–excellentreturns;meeQngLPexpectaQons;
growing
• FundraisingtoremainrobustduetodistribuQons
• SQllaseller’smarketbutwiderpoliQcal/financialinstabilitymaycauseshiningofthescales
• LPsareevolvingandincreasinginsophisQcaQon-directs/co-investments• Clearcurrentconcerns• ImpactofcurrentvaluaQonsonfuturereturns?• Europeanoutlook?
www.preqin.com
DataSources
• Preqin’sonlineservices:www.preqin.com/services
• Freereportsavailablefromwww.preqin.com/research
FollowusonTwiger:www.preqin.com/Twiger
FindusonLinkedIn:www.preqin.com/LinkedIn