Alfi’s much anticipated annual private markets conference got under way in Luxembourg this week following Alfii’s annual charity golf tournament. As a curtain-raiser to the second day of the event, Veronika Zukova, head of product development private equity real estate, Societe Generale Securities Services Luxembourg, sets out how the macroeconomic environment has affected the pace of fundraising.
Earlier in the year, both Preqin and Pitchbook indicated that it takes longer for European Private Equity (PE) funds to raise capital. Macro uncertainty and weak deals environment certainly affected PE. However, in terms of overall capital raised trend, European PE managers fared better than the US ones as the European Central Bank (ECB) kept the interest rates lower than the Fed. 5 of the 10 largest PE funds closed in H1 were raised by European firms.
The June and September ECB rate cut should have a positive impact on deals/exits, which in turn should positively influence fundraising in H2 for PE, Real Estate and Infra asset classes. Of course, there is still the uncertainty about the Fed September decision and the US elections, which can influence the outcome for 2024.
Our own deal flow indicates that the fund launches via Luxembourg didn’t slow down despite variations in uncertainty, due to various macro and industry specific trends. We have been as busy as ever, except the usual slowdown in August.
Throughout 2024, we observed an increased interest in private debt strategies, which is in line with the macroeconomic environment, and the evolution of this asset class and rise of novel strategies, especially in Europe. As we have anticipated this trend, boosting our capabilities to service different debt fund strategies has been our strategic priority for several years.
