Private equity fundraising increases by 18%

Statistics - compiled by PEREP Analytics on behalf of EVCA - show fundraising grew from €2.7bn (US$3.8bn) at the end of the first quarter of 2009 to €3.2bn at the end of the second quarter.

In a statement, EVCA said buyout funds "led the gains" with an increase of 28% on the first quarter to €1.9bn, while the amount raised by growth capital funds more than doubled to €205m.

However, total funds raised in the first half of the year remain 86% lower than in the second half of 2008.

EVCA secretary general Javier Echarri said: "Whilst Q2 figures suggest an improvement from Q1, current fund raising volumes are still a fraction of those seen in 2008. This remains a very difficult market environment where institutional investors are reassessing their investment strategies and programs and postponing investment decisions."

In addition, EVCA said the total amount invested in European companies by private equity firms fell by 16% compared with the first three months of the year to €3.9bn, while the total number of companies financed fell by 8%.

IE Consulting principal Matthew Craig-Greene said although a great deal of capital has been committed by pension funds and other limited partners for investment, the ability of the general partners to deploy it has diminished - and continues to diminish - significantly.

He said: "Looking at the aggregate value of deals completed in a certain time period gives an indication of the deal flow that exists, but this does little to help understand how any individual GP may be affected by other factors, as the number of GPs that invest in each deal is not constant and may lie between one and as many as ten, for some larger deals."