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Private equity leaders expect to see fundraising, dry powder and valuations on the up in 2018

Almost three-quarters (73 per cent) of chief financial officers (CFOs) and chief operating officers (COOs) at UK-based private equity and venture capital firms expect levels of dry powder – money raised but not yet invested – to climb further in 2018 as the rate of inflows remains high and attractively valued deals hard to come by.

Surveyed at the BVCA reception event for private equity CFOs and COOs, almost half (45 per cent) said they expect the private equity fundraising climate in 2018 to resemble 2017, a year that has seen General Partners attract more capital than ever.  However, 41 per cent predict it will become slightly harder to raise capital and only 14 per cent think it will get easier, suggesting that next year could see a marginal tightening of conditions. 
With the volume of dry powder expected to reach GBP1 trillion by the end of 2017 driven by cash-rich but yield-starved institutional investors, the majority (54 per cent) of CFOs and COOs expect valuations to continue heading upwards over the year ahead. This is almost twice the number of those who believe the valuations will fall while 18 per cent think they will remain about the same. 
Paul Lawrence, global head of fund services at Intertrust, says: “Senior private equity managers strongly believe the market will continue in the same direction of travel in 2018 with fundraising outpacing deployment and capital returns.
“We understand the challenging market environment faced by private equity managers who must also address increasingly sophisticated investor reporting and regulatory requirements. We look forward to supporting them so they can continue to improve businesses and generate value for their investors.”

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