ivate equity
Private equity’s rush to raise money raises fears of European sector shake-out
Lofty targets for 2026 may force investors to choose between buyout firms, leaving some short of new funds to invest
 Many European buyout groups will launch big fundraisings next year © ChangeableFocus/Dreamstime
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Alexandra Heal
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Big private equity groups want to raise three times as much cash in Europe next year as they are likely to secure in 2025, setting up a shake-out for the sector at a time when many investors have been starved of returns.
This year, the six funds aiming to raise €3bn or more are expected to manage combined commitments of about €34bn, according to advisory firm Campbell Lutyens. Next year, however, 10 big private equity funds are likely to hit the market, aiming to raise more than €110bn, the firm said.
The lofty fundraising targets may force investors to choose between buyout firms, leaving some short of new funds to invest.
It will be a “tale of haves and have-nots”, said Sunaina Sinha Haldea, global head of private capital advisory at Raymond James. “Undoubtedly, [it] will be a very tough year for European fundraisings next year when almost all the major houses will have their flagship strategy out.”
The expected rush of firms trying to tap investors comes at a time when fundraising is already taking longer than in the sector’s heyday. These processes often “take twice as long as they used to”, said Ali Floyd, co-head of European private equity fundraising at Campbell Lutyens.
Buyout firms have also been “putting off their fundraisings because everybody knows it is tough to raise money in the current environment?.?.?. Often investors will say, ‘Yes I’m happy to support your fundraising but I want my money back first’,” he added.
Advisers to the private equity industry say that a difficult market for initial public offerings has had a disproportionate impact on the ability of the biggest firms to return cash to their backers. The largest funds tend to buy bigger businesses, which are more suited to a listing when groups want to exit their investment.
The chair of London-listed Petershill Partners, which owns minority stakes in private equity firms, this week blamed investor concerns about the sector’s struggles to exit portfolio companies for its own share price weakness. On Thursday the group said it planned to delist and return more than $900mn to investors.
“All the noise around the difficulty of realising positions has made investors cautious,” Naguib Kheraj, who chairs Petershill, told the Financial Times.
Among the €3bn-plus buyout funds that have closed or are expected to close fundraisings this year are vehicles managed by Hg, Ardian and Oakley, according to people familiar with the matter.
Other groups which launched big fundraisings this year will also still be in the market in 2026, including a Permira vehicle aiming for €17bn.
Nordic Capital’s fundraising, which launched this year targeting €10bn, will continue into next year, people familiar with the matter said. Advent, which launched its fund targeting $26bn in February, originally aimed for a final close this year, the people added, but the process is expected to roll into 2026. The fund recently hit $20bn, one person added.
Other firms set to come to the market with new funds next year include Cinven and PAI.
The prospect of a congested market is likely to prompt big investors to be more selective in their relationships, said Floyd.
The competitive environment would shine a “very, very bright light” on comparative performance, he said, adding that institutional investors being tapped by so many large managers might well have less cash available to deploy with the hundreds of smaller funds in the European market.
Hg, Ardian, Oakley, Advent, Nordic Capital, Permira, Cinven and PAI declined to comment.
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