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European mid-market fundraising doubles in 2010, says Acanthus

Mid-market fundraising in Europe almost doubled in 2010 following the worst year for a decade in 2009, according to the latest report by leading placement agent Acanthus Advisers.

In its annual European Mid-Market Review, released today, Acanthus research shows that, despite continued worries over capital overhang and subdued investor appetite, fundraising has rebounded strongly in most European regions, with total funds raised reaching EUR12bn – up from EUR6.5bn in 2009 and close to levels seen in 2005.
However, the research also highlights the continued bifurcation of the market, with LP capital being drawn more strongly to those funds rated as top-tier by criteria including track record and strategy differentiation, and away from poor performers. Just 6% of capital in 2009/10 went to those GPs rated lowest – less than half the level seen in the 2004 to 2010 period as a whole.
Expectations for fundraising in 2011 are, however, optimistic, with the industry gradually solving its capital overhang problem and more funds coming to market. “A year ago, we noted that the total capital overhang for all European funds across both the middle and large-cap ends of the market was EUR138bn, but this has now dissipated to some extent, falling to EUR119bn,” says Armando D’Amico, Managing Partner at Acanthus. “Funds over EUR1bn are responsible for the majority of this, and interest in the mid-market is strong – albeit selective – so conditions should continue to improve.”
The research also provides a breakdown of funds raised by region, with France, Benelux and the UK showing particularly strongly, while the likes of Italy, Germany and Spain continue to struggle.

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