Around 500 new private capital firms were launched in 2016, and 309 so far this year, showing an increase in the pace of growth of new GPs, says Preqin. Some of these new firms are Vaultier7, Apiary Capital, Tenzing Private Equity and Meridia Capital.
According to a report from Preqin, there are 7,500 active private capital firms around the world, employing approximately 200,000 staff. In private equity alone there are around 108,400 people.
“The private capital industry has seen an overall trend of healthy growth, with the number of active firms in market increasing at a more rapid pace in the past couple of years,” said Christopher Elvin, head of private equity products at Preqin.
The average number of employees varies with the assets under management of the firms in question, with the smallest firms employing an average of 13 members, and the largest firms employing an average of 199 people.
The total volume of private capital assets under management increased to $4.6tn (€4.0tn) as at December 2016. Meanwhile, 2015 and 2016 saw the highest capital distributions on record ($858bn and $909bn respectively).
“Since 2008, private capital distributions to investors have been growing as well, and in the last five years, distributed capital has outstripped annual called capital, with 2015 and 2016 seeing record amounts of capital returned to investors,” Elvin said.
“This expansion of the industry has led many private capital firms to expand their operations, and the majority intend to keep recruiting additional staff through 2018,” he added.
More private equity firms in Europe than ever before
The number of new private equity firms doing their first deal in Europe has grown for three consecutive years and as a result the number of active buyout houses stands at its highest-number ever.
The number of active private equity firms in Europe has been growing continuously since 2000, when there were 320. There are currently 1,151 private equity firms, the highest number ever recorded in the Old Continent. However, that is the same number than last year so if no more first-time funds make a deal by the end of December, this will be the first time that the number of private equity firms remains flat.
Last year 70 new private equity firms invested from their maiden vehicles for the first time in Europe. That number is higher than in 2015, when 54 firms closed their first deal, or 2014, when there were 52 first-time funds, indicating that increasingly more dealmakers are raising their own vehicles – and actually deploying them.
|Active Europe-Based Private Equity Firms Over Time by Vintage of First Fund Raised (2000 – 2017 YTD)|
|Year||No. of Existing Firms||No. of New Firms|