European Alternatives on Track for Record Fundraising Year, Poised to Support a Recovering Europe
Wednesday 15 September 2021
Europe-based alternative asset fund managers now hold €2.06tn in assets under management (AUM) as of December 2020, up from €1.81tn a year ago—an increase of over 13%—and are on track to make 2021 a record year for fundraising. AUM had grown by 59% over the five years from December 2016 to December 2020, and Europe now accounts for 24% of the global alternative assets industry.
Fundraising, investment, and performance have accelerated in H1 2021. Fundraising by Europe-based private capital GPs in H1 2021 reached 59% of 2020’s full-year total, which, despite the practical challenges caused by travel and meeting restrictions, was the second-highest on record. Investment teams have been busy, with the value of private capital transactions closed in H1 2021 already at 83% of 2020’s full-year total, with venture capital, infrastructure, and private equity the most active sectors.
Strong equity and debt capital markets since Q2 2020 have translated into a buoyant exit market, not just for IPOs, but also for trade sales and refinancing. While return data in the early years of limited partnership funds is only an indicator of future performance, median net IRRs for 2018 vintage private equity and venture capital (PEVC) funds stand at 22.0%, while vintages 2011-2017 have been lifted to between 14.0% and 19.4%. Those appealing performance prospects should attract even more investor capital into European alternative assets going forward.
Real assets will be the winning bet for a post-COVID world. Most notably, a new post-COVID cycle could see a resurgence of inflation and continue to drive capital towards these asset classes which offer protection against inflation and the prospect of higher returns. Real assets can help to meet the economic challenges posed by the COVID recovery and fulfil investor expectations on both performance and impact, notably by helping allocate capital towards the energy transition. As such it is crucial to make real assets accessible to a wider range of savers.
Dominique Carrel-Billiard, Global Head of Real Assets at Amundi
We are ready to see Europe’s economies reach new records in 2021, optimistic that they are on the road to recovery following the pain of the pandemic. Our discussions with Europe-focused investors confirm that they are ‘sticking with the program’ as regards their allocations to alternative assets: faced with uncertainty and diminished returns across all asset classes, the attractions of alternative assets—including innovative green investment opportunities—remain compelling.
Mark O’Hare, Founder and CEO of Preqin
However, performance will not be uniform and the fundamentals of private market investing – manager selection, growth markets, and due diligence – will be as critical as ever. This report, the most comprehensive study of alternative assets in Europe, highlights which sectors, asset classes, and countries currently offer the best opportunities for investors.
Download the Preqin Markets in Focus: Alternative Assets in Europe Report, as well as individual country reports focused on France, Germany, Italy, and the UK.
To view and download relevant league tables, please click on the links below: