Coming to America: the top European GPs raising capital from across the pond in 2020

While private fund managers domiciled in the United States continue to be the most common destination for capital among US-based public pension plans, 2020 data from eVestment Market Lens highlights that Europe remains a key region for investment for North American investors. Even in a year of travel bans.

Europe’s CVC takes top spot in 2020

Case in point: CVC Capital Partners. The European headquartered, but globally present, manager was the overall number one destination for capital from public plans in 2020, with over $5.2 billion in reported commitments across 35 individual allocations.

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The vast majority of these commitments flowed into CVC Capital Partners VIII, the latest flagship fund for CVC. According to a recommendation memo from West Coast plan CalSTRS, who reported a $450 million commitment to the fund, CVC VIII will invest in, “controlled buyout transactions with the European upper middle-market space.”

After CVC, HgCapital recorded the greatest number of reported commitments in the year, with 24. In 2020, the London-based manager raised capital across three core commingled funds including Hg Genesis 9, Hg Mercury 3, and Hg Saturn 2. The funds leverage the same strategy but each targets companies in different enterprise value segments. Allocators including Connecticut Retirement, LACERS, and Orange County ERS made commitments to multiple Hg Capital funds in the year.

Top 5 Individual Commitments

European funds offer differentiation in core strategies

Northern European heavyweight EQT was also a top destination for capital in 2020 with nearly $2.3 billion in reported commitments from public plans. The fund manager’s EQT IX and EQT Infrastructure V funds collected $1.4 billion and $485 million respectively. New York State Common Retirement Fund allocated €300million to EQT IX and described it as a European buyout fund targeting investments “within the healthcare, business services, industrial technology, and TMT sectors.” In their recommendation to Oregon PERF for a commitment to EQT Infrastructure V, consultant Aksia makes a point of highlighting the manager’s European focus as a differentiator, “EQT is a focused investor with expertise across the spectrum of infrastructure investments and a deep network of industry relationships. Moreover, EQT is differentiated by its value-add strategy and European weighting.”

The data highlights the appetite for EU-focused funds, but also the level of competition present to tap this capital source. For those GPs coming back to market in 2021 and beyond, the unique market intelligence of Market Lens can help you know exactly which plans have appetite for your strategy, which of your peers or other EU funds they have recently committed to, and the preferences and nuances within their investment processes.

Private Markets Monitor: 2020 in Review

In this year-end edition of the Private Markets Monthly Monitor we explore commitment activity across the various private markets asset classes and highlight top GPs and allocators.

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