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European fundraising in first three quarters of 2004 up 25 per cent on year

European private equity fundraising totalled E20.4bn in the first three quarters of the year, up 25 per cent on the E16.3bn raised in the same period of 2003, according to figures published by Almeida Capital. The figures suggest the total for the year as a whole will be comfortably ahead of last year.

The value of final closes held by buy-out funds was E12.5bn, just short of the E13.1bn raised in the same period of 2003. However, the pipeline of funds still in the market is strong enough to intimate a final total well ahead of last year's.

The European venture sector remained fragile. Final closes totalled just E860m, compared with E1.4bn in the same period of 2003. Much of the capital raised so far this year has been by Israeli groups or, in the case of Benchmark, a US group planning to invest in Europe.

The turnaround in fundraising was even more pronounced in the US, where the first three quarters of the year saw $54.4bn closed compared with $20.1bn in the same period of 2003. There was a massive push from both the venture and buy-out sectors. Venture closes totalled $14.1bn, compared with just $2.2bn in the first nine months of 2003. Buy-out closes totalled $27.8bn, compared with $9.9bn in the same period last year.

The US fundraising cycle typically leads Europe by six to 12 months but there are increasingly conspicuous structural differences that might make that historical relationship less useful. The most obvious is the growing share of total European fundraising accounted for by buy-out funds, chiefly at the expense of the venture sector.

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