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Bringing you news, views and analysis since 2013
Christopher Elvin, Preqin

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2015 set for even higher levels of private equity investment following strongest year since crisis

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55% of private equity firms surveyed by Preqin at the end of 2014 stated they would deploy greater levels of capital in 2015, although 39% suggested it is more difficult to find attractive investments. Preqin’s Christopher Elvin comments:

2014 was the strongest year of private equity investments since the global financial crisis, yet the majority of private equity fund managers are looking to invest more this year. Preqin spoke to 260 firms* worldwide in November last year, and 55% claimed they would be investing a higher amount of capital in 2015 compared to last year. A further 35% of managers suggested they would be investing a similar amount to last year. Although very welcoming to the industry, particularly for those companies seeking financing from private equity sources in 2015, many managers are also expressing concerns about how difficult it is finding attractive investment opportunities in the current market.

Private equity firms invested USD332bn in buyout deals and USD86bn in venture capital investments in 2014, making it the strongest year for the asset class since the global financial crisis. Furthermore, private equity fund managers worldwide currently have over USD1.1tn available in dry powder (uncalled capital commitments) with which to make new investments.

The results of Preqin’s latest discussions with private equity fund managers paint a varied picture. On the one hand, off the back of a strong fundraising year and high levels of dry powder, managers are looking to put a lot more capital to work. This is welcome news to the industry, both for companies that receive this capital and those concerned about the level of capital overhang. 

A concern of many managers, however, is the availability of attractive investment opportunities. The competition among managers for the best assets, as well as buoyant prices following a strong year for portfolio company exits, is driving up price levels. This is making it more difficult for managers to find a solid pipeline of deals, which could impact returns and, in turn, affect investor appetite.


*Preqin’s November 2014 survey of 260 private equity fund managers was composed of 29% buyout firms, 26% growth firms, 21% venture capital firms, 6% fund of funds managers, 5% mezzanine firms, 4% distressed private equity firms and 9% other strategies. In terms of location, 41% were headquartered in Europe, 32% in North America, 13% in Asia and 12% in other regions.

The full results and analysis from Preqin’s latest fund manager survey can be found in the 2015 Global Private Equity & Venture Capital Report.

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