Global private equity investments up 35% in 2007 despite credit crisis

Global private equity investments up 35% in 2007 despite credit crisis.

A record $686bn of private equity was invested globally in 2007, up over a third on the previous year mostly due to strong buyouts activity according to IFSL’s Private Equity 2008 report.

Private equity fund raising also surpassed prior years with $494bn raised, up 10% on 2006. Despite growing turbulence in the financial markets in the latter part of the year, activity was split equally between the first and second half of the year. Early indicators show that activity is down in the first half of 2008 in comparison to the same period in 2007 as it became more difficult for private equity firms to obtain debt financing from banks to complete private equity deals.

The UK private equity market is the most developed outside the US, managing 9% of global investments and 12% of funds raised in 2007. The UK is the most important European country in the management of investments and raising of funds with around one-half of the European total. At 1.7% of GDP, the UK has a higher share of investments and funds raised than any other country apart from the US.

The 2007 global regional breakdown of private equity activity shows that North America accounted for 71% of global private equity investments and 66% of funds raised. It was followed by Europe with 15% of investments and 22% of funds raised. Asia-Pacific and emerging markets have become more important as investment destinations in recent years, particularly of China, Singapore, South Korea and India.

Click here to read Private Equity 2008

Picture: Creative Commons: FlickR: Atelier Tee

Comments

[Deepak Sahijwala]

Well written article, full of insight...

[Investment]

Private equity is money invested in companies that are not publicly traded on a stock exchange or invested as part of buyouts of publicly traded companies in order to make them private companies.