IN EUROPEAN PRIVATE equity markets, the vast bulk of the assets raised last year- about 80 per cent of the total US$92 billion - went into buyouts, not start-ups. The money was invested in mature companies, usually before their public listing.
The figures released recently by the European Private Equity & Venture Capital Association (EVCA) represent annual funds raised by private equity and venture capital management companies located in 27 countries Europe-wide.
What it means is that there is a large pool of money available for private equity investments, and it is not just high and ultra high net worth individuals with money who are interested in investing.
Some of the key investors in private equity funds are institutions, pension funds, and large listed companies in the United States and Europe with a desire to invest in something other than the traditional stocks and mutual funds. According to EVCA's figures, pension funds took the lead as the main source of capital last year, representing 25 per cent of the total funds raised and overtaking banks by US$6.4 billion for the first time since 2001.
Together, pension funds and banks provided almost 43 per cent of funds last year, representing a trebling in size of their allocation to private equity in absolute terms.
These and other figures released by EVCA showed that the total raised by the private equity industry in Europe was more than double the 2004 figure of US$35 billion.