European private equity deal value hit a record in the first quarter of 2020 thanks to four large transactions that contributed €18.1 billion ($20 billion), according to a report from PitchBook.
The report shows that general partners closed on 1,025 deals totaling €132.9 billion in the quarter, up 6.2% and 40.4%, respectively, from the first quarter of 2019. The four megadeals were not identified.
The average size of a private equity deal was €282.6 million in the first quarter this year. But the report said due to the COVID-19 impact on the European economy in the subsequent quarters in 2020, average deal size will be substantially lower. The report predicted that it could become increasingly difficult to finance larger deals without the help of the syndicated loan market. Registration is required to download the report.
Borrower terms in the European leveraged finance market were favorable in the quarter, the report added. "Competitive pricing levels for borrowers that offered institutional investors compelling risk-adjusted returns, heightened certainty around Brexit and low interest rates encouraged credit flows to finance private equity deals," the report said.
Fundraising, however, fell to €10.9 billion raised through 20 fund vehicles due to the coronavirus pandemic, which has made it increasingly difficult for limited partners to conduct due diligence and face-to-face meetings. Comparative data for the same quarter last year were not immediately available.
