Buyout Fundraising Declined by Over 70% Due to Corona Crisis

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Buyout fundraising volume in Europe is in stark contrast with a sharp decline of over 70% QoQ and YoY, making it the lowest quarter since late 2017.

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Retrieved on: 
Tuesday, June 16, 2020
Information
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Yoy
Geotags: 
NEW YORK
Organisation: 
CEPRES
Website: 
http://www.cepres.com
Summary
Key Points: 
  • Buyout fundraising volume in Europe is in stark contrast with a sharp decline of over 70% QoQ and YoY, making it the lowest quarter since late 2017.
  • US buyout fund net IRR returns declined sharply between 2003 and 2006, which were the vintage years immediately preceding the impending crisis in 2007 and 2008.
  • From a fundraising perspective, the Corona Crisis could further impact GP targets and timelines resulting in delays due to changes in LP fund commitment plans.
  • Our award winning online platform securely connects thousands of professionals in the largest private investment network in the world.




Buyout Fundraising Declined by Over 70% Due to Corona Crisis

NEW YORK, June 16, 2020 /PRNewswire/ -- The CEPRES Private Capital Market Outlook for the first quarter of 2020 using the latest data from the CEPRES Platform shows how buyout fundraising in the US declined by almost 50% QoQ and 20% YoY, but is still substantially above volumes during the post-GFC era of 2009 -2012. Buyout fundraising volume in Europe is in stark contrast with a sharp decline of over 70% QoQ and YoY, making it the lowest quarter since late 2017.

US buyout fund net IRR returns declined sharply between 2003 and 2006, which were the vintage years immediately preceding the impending crisis in 2007 and 2008. Vintage year 2009 performance rebounded sharply as the market dislocation did provide attractive opportunities to GPs and funds that did not remain idle on the sidelines as the dust was still settling.

From a fundraising perspective, the Corona Crisis could further impact GP targets and timelines resulting in delays due to changes in LP fund commitment plans.

The full report is available to CEPRES subscribers from: https://www.cepres.com/latest-intelligence

All analysis is generated via investment and portfolio due diligence conducted on the CEPRES Platform by investment counterparties based on live transactional data. More information and further detailed analysis are available to CEPRES clients and upon request.

Commentary:

"Funds that own large liquidity reserves will benefit from the multiple decrease and soon start to invest in a market with low valuations and support their existing portfolio companies with larger amounts. In technology and digital sectors, we assume a very fast recovery for companies with revenue models that are independent of the economic cycle or that are replacing business divisions of traditional companies based on technology. In these areas, both exits and investments will quickly pick up again in their activity."

Dr. Daniel Schmidt, Founder & CEO, CEPRES

About CEPRES

CEPRES is the leading digital platform for investment decisions & data solutions for private capital markets. CEPRES is the recognized market leader for fund, deal and operating asset performance analysis. Our award winning online platform securely connects thousands of professionals in the largest private investment network in the world. CEPRES combines the most secure digital data exchange with sophisticated SaaS solutions and expert analysis frameworks to empower LPs, GPs and related professionals. Through CEPRES, decision makers can secure their investment data to gain true insights on their portfolio of funds down to single operating assets within a confidential yet fully flexible framework.

The CEPRES platform includes a network connecting buy- & sell-side market participants. Institutional Investors (LPs), Fund Managers (GPs), Advisors, Administrators, Fund of Funds and other investment professionals interact on one platform: GPs confidentially benchmark their track record, attract fitting capital sources and demonstrate their alpha to investors. LPs forecast their portfolio outcomes, optimize asset allocations and enhance due diligence.

To date over 2,750 GPs & LPs have securely exchanged investment data of over 7,900 funds and 81,700 deals worth over $29.5 Tr. in Enterprise Value.

For further information visit www.cepres.com.

For more information about this release or to schedule an interview:

Contact: Birgit Wiggert
Tel: +49 (0) 89 232 495 628
Email: [email protected]

 

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