Global Buyout Fundraising Declines 20% - Returns May Soften
Feb 24, 2020
NEW YORK, Feb. 25, 2020 /PRNewswire/ -- The latest Private Capital Market Outlook from the CEPRES Platform shows buyout fundraising in the US declined 25% and Europe declined 20% vs a strong Q3. Activity remained high compared to previous years, but shows a softening appetite going into 2020.
From a performance perspective, US buyout funds have outperformed Europe by a significant margin across most vintages since 2007 with Europe outperforming only slightly in 2016. Looking through the 7,700 funds to 79,000 PE-backed deals on CEPRES, transaction volume remains high in both Europe and the US for Buyouts and Venture. The last 6 years have seen a general decline in Gross Returns across both regions, which is likely to be reflected in softening fund net IRRs going into the next decade. 2017 and 2018 returns especially in Europe are still negatively impacted by the J-Curve effect, whereas the US counterparties already produce decent returns since the fast increase in valuations offsets initial fees already.
All analysis is generated via investment and portfolio due diligence conducted on the CEPRES Platform by investment counterparties based on live transactional data. More information and further detailed analysis is available to CEPRES clients and by request.
The full report is available to CEPRES subscribers from: https://www.cepres.com/latest-intelligence
Commentary:
"The fundamentals of the US economy remain strong and are helping drive capital into buyout and venture investments. Whilst fund returns remain higher than Europe, macro-economic and capital headwinds are starting to impact on fundraising and deal returns globally. GPs and LPs need to be data driven in underwriting their investments and CEPRES has proven to provide the best investment intelligence to drive returns. In the current market we advise investors and managers alike to analyze potential losses and defaults closely. Measuring and benchmarking Deal Loss & Recovery rates alongside IRR returns can provide great insights."
Dr. Daniel Schmidt, Founder & CEO, CEPRES.
About CEPRES
CEPRES is the leading digital platform for investment decisions & data solutions for private capital markets. CEPRES is the recognized market leader for fund, deal and operating asset performance analysis. Our award-winning online platform securely connects thousands of professionals in the largest private investment network in the world. CEPRES combines the most secure digital data exchange with sophisticated SaaS solutions and expert analysis frameworks to empower LPs, GPs and professionals. Through CEPRES decision makers can secure their investment data to gain true insights on their portfolio of funds down to single operating assets within a confidential yet fully flexible framework.
The CEPRES platform includes a network connecting buy- & sell-side market participants. Institutional Investors (LPs), Fund Managers (GPs), Advisors, Administrators, Fund of Funds and other investment professionals interact on one platform: GPs confidentially benchmark their track record, attract fitting capital sources and demonstrate their alpha to investors. LPs forecast their portfolio outcomes, optimize asset allocations and enhance due diligence.
To date over 2,750 GPs & LPs have securely exchanged investment data of over 7,700 funds and 79,000 deals worth over $28.2 Tr. in Enterprise Value.
For further information visit www.cepres.com.
For more information about this release or to schedule an interview:
Contact: Birgit Wiggert
Tel: +49 (0) 89 232 495 628
Email: [email protected]
SOURCE CEPRES
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