2015 EMEA private equity deal count down but capital investment up

BY Fraser Tennant

Q1 2015 saw a 34 percent increase in the capital invested in the Europe, Middle East and Africa (EMEA) private equity market, according to S&P Capital IQ’s new EMEA Private Equity Market Snapshot.

The report's headline is that EMEA as a global private equity investment destination, although down in Q1 2015 in terms of deal count compared to Q1 2014, was up in aggregate transaction values - €41bn deployed to EMEA located target companies this year across 1020 new deals, compared to €30.6bn last year across 1205 deals.

“EMEA attracted 494 new deals putting €2.1bn to work. This represented a 10 percent increase in capital invested but a 15 percent reduction in deal count from 579 new deals last year", notes the report.

 “The data suggests that the venture capital world is increasingly concentrating on a tighter set of potential companies but deploying more capital across individual deals in order to maximise the growth potential of the selected few.”

The report also found that, on the exit side, Q1 2015 recorded 330 divestments for global private equity firms realising €42.9bn, an increase of 17 percent on Q1 2014’s €36.8bn across 396 exits.

And when considering the wider global political discourse, the report examines investments made by global private equity firms into EMEA-headquartered target companies as opposed to tax haven headquartered firms, highlighting that most of the activity originated by the latter in the past 10 years benefited Northern and Western Europe.

“Investments in the financial sector, specifically real estate operating companies, have seen the biggest quarter-on-quarter increase in terms of aggregate capital deployed with €15bn invested in Q1 2015 compared to €5.6bn in Q1 2014”, says the report.

“A significant proportion of the €15bn was explained by the largest deal of Q1 2015 which saw Qatar Holding and Brookfield Property Partners acquire the remaining 71.4 percent of Songbird Estates PLC, the parent company of Canary Wharf Group, for €8.7bn.”

The report also considers the current status of the oil & gas sector, noting that despite the overall health of EMEA private equity activity seen so far in 2015, it remains to be seen whether recent investment in the North Sea will be enough to kick start significant dealmaking activity.

Report: EMEA Private Equity: Market Snapshot

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