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143 bn Raised in 1H 2012 : Private Equity Investors Optimistic but Cautious

Despite the ongoing crisis in the Eurozone and other challenging economic conditions, research shows that private equity (PE) investor sentiment is optimistic. PE fundraising picked up momentum in the second quarter and PE funds raised aggregate capital of $143 billion in the first half of 2012, a slight increase over the second half of 2011.

The optimistic inveprivate-equity-investors-newstrack-arancastor sentiment is perhaps justified given that private equity annualized horizon returns over 10 years to December 2011 stand at 11.9%, above that of the S&P 500 index. As per a Preqin report, the total assets under management held by private equity funds worldwide reached $3trn at the end of 2011, a 9% increase over the previous year.

Despite the increase in the funds, investors are also displaying caution as just 23% in a Preqin survey expect to invest in new funds in the next 12 months. The top attraction for investment is distressed PE funds. In terms of regions, North America has been found to be the most attractive followed by Asia and Europe. Although 24% of the investors said Europe is not much attractive at present, some investors in the survey said it does present strong opportunities in the long-term.

It is a waiting game for now!