Global PE investments regain appetite, touch $67bn in HI 10

Reflecting recovery in investor appetite, private equity (PE) firms have already pumped in $67 billion globally in the first half of this year, just about $14 billion less than they invested in entire 2009, says a report.

PE investments, which were at their peak in 2008, with an aggregate commitment of whopping $248 billion, fell to $81.6 billion in the full year of 2009, according to the data compiled by research firm Preqin.

However, the first six months of 2010 have seen private equity deals valued at $67 billion on account of the increased investor confidence, after last year's dip in fund raising due to economic downturn, the report said.

"H1 2010 has shown signs of a healthier fund raising environment, with funds exceeding their target capital commitments, " it added.

It said telecom, media and communications, consumer product and consumer services accounted for the major chunk of money invested by PE firms up to June this year.

The largest deal for the first half of 2010 was $4.5 billion investment in British firm Tomkins plc by CCP Investment Board and Onex Corporation.

The next was $1.4 billion investment in Avolon by Cinven, CVC Capital Partners and Oak Hill Capital Partners, while TPG poured $1.3 billion in American Tire Distributors.

Interestingly, the maximum deals that happened during the period were of smaller size.
    
PE transactions of less than $500 million accounted for 60 per cent of the total capital invested, while deals between $500 million-$1.5 billion contributed to 24 per cent of the total investment.
    
Private equity investments were predominant in US with North America accounting for more than half (52 per cent) of the total. Just about 31 per cent of the funds came from Europe while 17 per cent are based in Asia and rest of world.
    
The report suggested that although majority of the funds are planning to maintain or increase their private equity investments over the next 12 month, they are still reluctant to put in mega bucks.

The survey of Preqin was based on 500 buyout firms, taking into account their investment strategies, recent deals, fund details and so on.