European Alternative Investment Overview, Part II: Private Equity Funds & Venture Capital Funds

September 13, 2005


Paris, France September 13, 2005

European Private Equity Funds to Grow by 17.1% through 2009

Celent projects that assets under management at European private equity funds will rise as Europe becomes the key market for private equity deals.

The world of alternative investment funds is hot洋oney is pouring into private equity funds at an accelerated pace, with investors chasing above-average returns in a lackluster market. While the US is the leader in private equity fund assets under management, Europe is a major player. Europe accounts for nearly US$360 billion in private equity and venture capital out of a total in excess of US$1 trillion.

In a new report, European Alternative Investment Overview, Part II: Private Equity Funds and Venture Capital Funds, Celent provides an overview of Europe痴 private equity and venture capital industries, identifying leading industry players, discussing the prospects for future growth and analyzing how the pressures in the industry will impact the various types of asset management firms.

"While investors will continue to invest in the top private equity funds, many funds will fail to match the performance of the public markets over the next several years, much less exceed it," said Lauren Bender, analyst in Celent痴 Securities and Investments group and author of the report. "In today痴 European buying frenzy洋uch of which is occurring between private equity firms耀ome firms will find that they have overpaid for assets, and they will have a hard time wringing value from these assets and achieving expected returns. However, investors are already wary and have become increasingly selective about the funds in which they invest; while record funds have poured into some funds, others have failed to even come close to their fund-raising goals," she added.

Over time, Celent expects to see the lines between the various alternative investment funds continue to blur, with private equity and hedge funds partnering and merging. Eventually there will be several large "alternative investment" funds that engage in hedge, private equity, venture, and property investing as the market merits rather than being constrained to pursue only one of those strategies.

The report provides an overview and analysis of key market trends, identifying leading industry players and discussing the industry's prospects for future growth. Celent identifies the forces making it harder for many players in the alternative investment field to continue to achieve the above-average risk-adjusted returns which have made them such a popular class of investments, and analyzes the threat they pose to other classes of funds.

The report includes a listing of the largest European private equity fund managers, private equity fund of fund managers, and venture capital fund managers.

The primary countries covered in the report are the United Kingdom, France, and Scandinavia.

This report is the second of a two-part series on European alternative investment funds. Part I focuses on European Hedge Funds, Hedge Funds of Funds, and Property funds. Part II focuses on Private Equity funds and Venture Capital funds.

The 43-page report contains 24 charts and 3 tables. A table of contents is available online.

All Members of Celent's Institutional Securities & Investments research service can download the report electronically by clicking on the icon to the left.  Non-members should contact for more information.


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Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

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Table of Contents


Paris, France September 13,  2005

European Alternative  Investment Overview, Part II

Return to report Abstract

Executive Summary 3
Alternative Investments: An Overview 5
  Overview 5
  Market Size 6
  Investors 8
  Returns Threatened 8
Private Equity Funds 9
  Defining A Private Equity Fund 9
  Buyout Funds: A New Global Force 9
  Venture Capital: Fueling Growth 10
  Private Equity Funds vs. Hedge Funds 11
  The Investors 12
  Market Size 12
  Historical Performance 13
  Compensation 14
European Private Equity Funds 15
  Performance 15
  Into The Big Time 16
  The Funds 18
  Private Equity Funds of Funds 20
  Growing Interest From Institutional and International Investors 23
  Key Trends 24
Venture Capital 30
  Overview 30
  2005 European Outlook Brightens 33
  Top 25 European Venture Funds 34
  Europe's Hot Markets 36
  Europe's Challenges 37
  Key Trends 39
Conclusion 41
Objectivity & Methodology 42

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