Q3 saw a typical decline in overall European private equity value due to the summer period, however, the overall trend on value in 2015 is positive over that experienced in the last couple of years.
That’s according to preliminary figures from the Q3 2015 unquote” European Private Equity Barometer, published by unquote” in association with SL Capital Partners, which suggests that more disappointingly, the number of European private equity-backed deals declined by 10 per cent, from 368 transactions to 330 transactions. This is a continuation of a trend that started in Q1 2015 and was impacted by a significant reduction in early stage deals.
The aggregated value of European buyout deals completed in Q3 followed the trend set by the wider private equity markets. Value reached a higher plateau but decreased from Q2 2015 following the noted summer trend. Total value fell to EUR30.8 billion from EUR41.5 billion.
The decrease in deal volume was less marked than in early stage deals, with 123 completed, representing a decline of 14 deals from the prior quarter. This decrease in volume was consistent across transaction size ranges.
France and the UK were the only two regions to record an increase in deal numbers with France up 17 per cent from 29 to 34 deals, and the UK increasing by 9 per cent from 35 to 38 deals.
Benelux and the Nordic markets registered increases in the value of deals completed, reflecting a number of larger investments in a smaller set of opportunities.
Peter McKellar, Senior Managing Partner of SL Capital Partners, says: “We note that there was the typical decline in volume and value of deals in Q3 as the European markets took a break from a hectic first half in 2015. It is encouraging to note, however, that the total value of deals does seem to have moved to a higher plateau, with the first three quarters in 2015 averaging EUR29.6 billion invested against the 2014 quarterly average of EUR21.2 billion. On an overall basis the total deal volumes were depressed as a result of a decline in early stage deals, but for the European buyout market it was ‘business as usual’. Against this background, we would expect Q4 2015 to continue the trend of higher value as managers focus on new deal activity”