Record number of first-time funds on the road

More first-time private equity funds have sought to raise capital in 2017 than in any other year on record, according to online marketplace Palico.

There are currently 770 debut funds on the road, a 50 per cent increase over the 513 first-time funds seeking capital a year ago and 48 percent more than the previous all-time high of 520 in 2008.

First-time funds captured eight per cent of total fundraising until July, according to Preqin data. That is the highest percentage since 2011.

However, almost half of all private equity investors said they wouldn’t consider first-generation funds because they lack a track record to assess.

More private equity firms in Europe than ever before

Preqin data shows 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
2000 320 103
2001 420 82
2002 502 65
2003 562 57
2004 618 52
2005 668 68
2006 731 89
2007 819 118
2008 922 74
2009 989 53
2010 1,018 57
2011 1,030 48
2012 1,037 44
2013 1,055 72
2014 1,104 52
2015 1,131 54
2016 1,151 70
2017 YTD 1,151 47

Source: Preqin