Home > Back to Publisher > Report Information

Private Equity Funds in Europe 2008

Datamonitor
August 13, 2008
16 Pages - SKU: DFMN1873180

Abstract Table of Contents Search inside this report Related Reports

Countries covered: Europe

Introduction

This report presents views on the market for private equity investment based on a survey of 100 leading asset managers across Europe. The report, which covers mass market, high net worth and institutional customer groups, forms part of a series looking at the market for alternative investments in Europe.

Scope

A developing partnership between Sovereign Weath Funds and private equity firms in host countries is limiting opportunities for small local investors.
Analyses the market context of private equity fund investment in Europe today and reports asset managers' views on likely development in the market.
Identifies the primary client segments and appropriate marketing and distribution strategies for individual countries.

Highlights

Since the well-publicized bailout of American & European banks by SWFs in 2007, there has been great concern expressed about SWFs. Although there is a developing partnership between these funds & private equity firms in host countries, there will inevitably be some crowding out of private equity investment opportunities for small local investors.

The European private equity fund market is now primarily focused on institutional investors. Although little more than a decade has passed since institutional investors first began to invest in private equity, their participation has grown to the extent that they now dominate the market for private equity investment in all European markets except the UK, where high net worth investors are the main client group.

Adverse economic conditions make for a more challenging marketing environment, where all customer groups perceive the benefits of private equity funds for risk diversification. Private equity is an asset class more suitable for investors with long time horizons and who are able to apportion a part of their portfolio to significant risk exposure.

Reasons to Purchase

Gain insights into your target client segments, based on the collective experience of your peers in the private equity industry.
Gain insight into the strategic options for developing private equity fund offerings in this challenging marketing environment.
Key market information on the benefits of private equity fund investment for risk diversification.

Additional Information

Reports provide a unique mix of market intelligence, insightful analysis and forecasting based on primary quantitative and qualitative research. A single report will give you the key data and detailed analysis of a market, issue or trend.

Overview: Catalyst; Summary; Methodology; Executive Summary; Institutional investors are the largest customer segment for European private equity funds, but important shifts in the market are occurring; Special feature: The threat of sovereign wealth funds; The European private equity fund market is now primarily focused on institutional investors except in the UK where high net worth investors are the main client group; Institutional investors are particularly concerned about the liquidity of private equity funds in the current market; High net worth investors are seeking risk diversification but their demand is being held back by a lack of product understanding; The lack of liquidity of private equity funds may be a problem for mass market investors; Table of Contents; Table of figures
SPECIAL FEATURE: THE THREAT OF SOVEREIGN WEALTH FUNDS: Sovereign wealth funds are significant in number, assets under management, and influence; The Abu Dhabi Investment Council is by far the biggest SWF; SWFs are growing at a significant rate; SWFs are becoming increasingly aggressive in their investment strategies; The growth of SWFs means they are increasingly looking for the same investment opportunities as other traditional funds; Sovereign wealth funds are here to stay; The threat of SWFs is based on fears about national sovereignty being undermined; The management of SWFs is often professional with varying degrees of transparency; The activities of SWFs have implications for global financial markets; SWFs have helped to restore economic stability; A light regulatory framework could forge a partnership between SWFs and host country private equity funds; National and international regulation of foreign investment exists and a transnational code of practice is being introduced; Because of their significance, sovereign wealth funds are winning out; The activities of SWFs have implications for global financial markets; After an initial rivalry, private equity investors and SWFs have forged a partnership which provides protection for both; Home country private equity investors are losing out on some key private equity projects; Market Context; Institutional investors are the largest customer segment for European private equity funds, but important shifts are occurring; French mass market investors are increasing in importance while HNWs are decreasing, but institutional investors dominate the private equity market; Strong knowledge and the desire to diversify risk account for institutional investors' dominance in France; Despite regulatory barriers and limited liquidity, institutional investors will become an increasingly dominant customer base for private equity; The importance of the French HNW customer base for private equity is decreasing in favour of institutional investors; Product expense is a barrier for HNWs in France; Data tables; Italian HNW investors decreased in importance while institutional investors increased, but this will reverse in the next three years; HNWs have reacted badly to the economic downturn; Expenses hinder Italian HNW investors' further take-up of private equity; Italian institutions are cautious investors; German mass market investors became the largest client base for private equity funds among some asset managers for the first time in 2008, but institutional clients are still the dominant client base overall; Mass market investors are now the dominant customer base for private equity among 15% of German asset managers but there is concern that the mass market has insufficient understanding of the product; Downside protection is motivating institutional clients to take up private equity, but there is a concern about risk; Spanish institutional investors dominate the private equity fund market there while HNWs are decreasing in importance; Limited liquidity is hindering further take-up by institutions; Tax changes in 2007 eased the burden for private equity investors; Limited liquidity also bothers HNW and mass market investors in Spain, though media coverage of current economic troubles is reducing demand as well; HNWs became the most important customer base for private equity funds in the UK in 2008, while lack of selling expertise is hindering mass market take-up there; HNWs overtook institutional investors as the dominant client base in 2008; Education is the key to wider take-up; Advisor expertise is slowing up mass market investment in private equity in the UK; Mass market and HNW investors will become more important customer bases for private equity funds across Europe in the next three years; German mass market investors will not be put off by media hype to the same extent as other countries' mass market investors; Mass market investors are expected to be the largest customer base for private equity funds among 20% of asset managers in three years; Private equity management fees are a concern; The Italian HNW customer base will increase in importance within three years; Spain will see a slight increase in the importance of mass market investors in private equity funds; British mass market investors will continue to increase in importance for private equity funds in the next three years; Institutional investors in France will increase in importance for private equity fund providers; High product knowledge will drive the institutional market further; Distribution Dynamics; Reaching the mass market for private equity funds; Across Europe mass market investors are seeking diversification in their portfolios; French and Italian mass market investors are deterred by the expense and risk of private equity funds; Asset managers can best reach French mass market investors directly or through the retail banks; The German retail banks offer the best route to mass market investors there; Financial advisors in Italy and Spain are the best way to sell to mass market investors in those countries; Retail banks are one of the strongest ways to sell private equity funds to mass market investors in the UK; Reaching the high net worth market for private equity funds; In Germany, Italy, Spain and the UK, HNW investors are looking to diversify their portfolios; But in France downside protection is also an important motivator for HNW investment in private equity; Private equity managers and their marketing teams need to undertake an education promotional campaign; The key to boosting demand in France centres around communication about strategy and challenging tax/regulatory issues while in Spain confronting the limited liquidity of private equity is important; The German and UK markets require education about the benefits of private equity for risk diversification; Individual portfolio reviews should be offered to HNW clients in Italy; Reaching the institutional market for private equity funds; Institutions across Europe invest in private equity to diversify their portfolios; Liquidity, regulatory issues, risk and product knowledge are the key concerns for would-be institutional investors; An enhanced information and portfolio review service will help to sustain confidence among institutional investors; Asset managers in individual countries favour different distribution channels to reach potential institutional clients
APPENDIX: Definitions; Arbitrage; CAGR; Derivative; Fund of hedge funds; Fund supermarket; Hedge fund; HNW; IFA; Leveraged Buyout (LBO); Liquid assets; Mass affluent; OEICs; Private Equity; Private Equity Funds; Selling short; Ultra HNW; Unit trusts; Venture Capital Funds; Methodology; Bibliography; Further reading; Ask the analyst; Datamonitor consulting; Disclaimer
List of Tables: Table 1: Which is your biggest customer group for private equity/ venture capital investments today?; Table 2: What do you think will be the major barrier to wider take-up of private equity/venture capital investments by institutional investors over the next year?; Table 3: To what extent do you agree that there is likely to be a significant economic downturn in Europe in 2008?; Table 4: To what extent do you agree that investors will be more cautious about investing over the next 2 years because of current conditions and their memory of the 2000-2003 downturn?; Table 5: To what extent do you agree that media coverage of current economic conditions is pushing customers into capital protected products?; Table 6: To what extent do you agree that media coverage of current economic conditions is reducing demand for private equity investments?; Table 7: What do you think will be the major barrier to wider take up of private equity funds by high net worth investors over the next year?; Table 8: What do you think will be the major barrier to wider take-up of private equity/venture capital funds by mass market investors over the next year?; Table 9: Which will be your biggest customer group for private equity/ venture capital investments in three years time compared with which is your biggest customer group now?; Table 10: To what extent do you agree that media coverage of current economic conditions is pushing customers into capital protected products?; Table 11: What type of organization do you work for? Q4 2007; Table 12: What is the average case size of business you deal with?; Table 13: In your opinion, what is the most important reason why mass market investors are demanding private equity and venture capital funds today?; Table 14: What do you think is the best way for private equity funds to be distributed to mass market investors?; Table 15: What is the most important reason why high net worth investors are demanding private equity and venture capital funds today?; Table 16: Facing the possibility of a global economic slowdown, which of the following strategies will be most effective in sustaining demand for alternative investments among your high net worth clients or the wealth managers who advise them?; Table 17: What do you think is the best way for private equity to be distributed to high net worth investors?; Table 18: What is the most important reasons why institutional clients are demanding private equity investments today?; Table 19: Facing the possibility of economic slowdown, which of the following strategies will be most effective in sustaining institutional demand for private equity investments among your clients or the wealth managers who advise them?; Table 20: What do you think is the best way for the private equity funds to be distributed to institutional investors?
List of Figures: Figure 1: Sovereign wealth funds are commodity or non-commodity based; Figure 2: The Abu Dhabi Investment Council dwarfs other sovereign wealth funds; Figure 3: Institutional investors dominate the European private equity investment market except in the UK; Figure 4: The limited liquidity of private equity investment is a key barrier to its wider take-up by institutional investors; Figure 5: Private equity fund managers are concerned that potential HNW investors lack a good understanding of this asset class; Figure 6: The risk of private equity/venture capital funds is limiting mass market demand; Figure 7: Over the next three years, there will be notable growth in mass market demand for private equity investment; Figure 8: Private equity funds will face more competition from capital-protected and structured products; Figure 9: The IFA industry is characterized principally by case sizes of less than £5,000; Figure 10: Private equity funds offer mass market investors the opportunity to diversify risk; Figure 11: Mass market investors are best targeted through financial advisors; Figure 12: Risk diversification is the primary driver of demand among HNW investors; Figure 13: Fund managers need to work harder to promote their offerings and investment strategies; Figure 14: Preferred distribution channels for HNWs vary among countries; Figure 15: Institutional investors in Europe are looking for portfolio diversification; Figure 16: Providers and distributors would do well to keep institutional clients informed about investment strategies and portfolio performance; Figure 17: Providers are divided over the best distribution channel to reach institutional investors

More Europe Investment Banking & Venture Capital Reports

Retail Savings & Investments in the United Kingdom by MarketLine
Introduction Retail Savings & Investments in the United Kingdom industry profile provides top-line qualitative and quantitative summary information including: market size (value 2006-10, and forecast ...

Retail Savings & Investments in Germany by MarketLine
Introduction Retail Savings & Investments in Germany industry profile provides top-line qualitative and quantitative summary information including: market size (value 2006-10, and forecast to 2015). ...

Retail Savings & Investments in France by MarketLine
Introduction Retail Savings & Investments in France industry profile provides top-line qualitative and quantitative summary information including: market size (value 2006-10, and forecast to 2015). ...

Retail Savings & Investments in Europe by MarketLine
Introduction Retail Savings & Investments in Europe industry profile provides top-line qualitative and quantitative summary information including: market size (value 2006-10, and forecast to 2015). ...

UK Guaranteed Bonds 2011: Growth opportunities in the bond market by Datamonitor
Economic turmoil has been detrimental to the investment bond market and new business for guaranteed bonds has reflected this overall decline. However, Datamonitor is forecasting ...

See all reports like this >>

More Europe Reports

A Comprehensive Study Of The UK Video Conferencing Equipment Market In 2010, Rating & Valuing Each Of The 30 Companies That Operate In Today's Market by Plimsoll Publishing Ltd.
The Plimsoll Analysis provides you with the most up to date and comprehensive analysis of the top 9 companies operating the market. It is ...

A Comprehensive Study Of The UK Tableware Market In 2010, Rating & Valuing Each Of The 166 Companies That Operate In Today's Market by Plimsoll Publishing Ltd.
The Plimsoll Analysis provides you with the most up to date and comprehensive analysis of the top 9 companies operating the market. It is ...

A Comprehensive Study Of The UK Surveyors & Valuers Market In 2010, Rating & Valuing Each Of The 943 Companies That Operate In Today's Market by Plimsoll Publishing Ltd.
The Plimsoll Analysis provides you with the most up to date and comprehensive analysis of the top 9 companies operating the market. It is ...

A Comprehensive Study Of The UK Subsea Engineering Market In 2010, Rating & Valuing Each Of The 142 Companies That Operate In Today's Market by Plimsoll Publishing Ltd.
The Plimsoll Analysis provides you with the most up to date and comprehensive analysis of the top 9 companies operating the market. It is ...

A Comprehensive Study Of The UK Structural Engineering Consultancy Market In 2010, Rating & Valuing Each Of The 300 Companies That Operate In Today's Market by Plimsoll Publishing Ltd.
The Plimsoll Analysis provides you with the most up to date and comprehensive analysis of the top 9 companies operating the market. It is ...

See all reports like this >>

Private Equity Funds in Europe 2008

Share this report

Other tasks

Research Assistance

Related Markets

Investment Banking & Venture Capital Reports

Free Alert Me service