European private equity deal volume and value posted their second-highest quarterly numbers ever in the second quarter, boosted by core middle-market deal activity.
A report from PitchBook Data shows that general partners closed on 1,800 deals in the second quarter totaling €169.6 billion ($201.9 billion) in the quarter, up 161.2% and 137.3%, respectively, vs. the first quarter of 2020. In the first quarter of 2021, general partners closed more than 1,936 transactions totaling €158.8 billion.
Strong leveraged lending markets resulting from institutional investors' liquidity and aggressive hunt for yield have made financing and refinancing deals historically cheap, Pitchbook said.
European private equity exit activity had a good run in the second quarter with 369 exits. The quarter's exit value reached a total of €126.3 billion.
In the first quarter, exit value reached €115.5 billion. In the six months ended June 30, 2020, exit value totaled €55 billion, while in three months ended March 31, it stood at €35.7 billion.
A large uptick in liquidity events greater than €2.5 billion was the main driver for exits in the quarter, with five exits worth a combined €27 billion taking place in the three-month period, Pitchbook said.
By exit type, the quarter was dominated by public listings ahead of buyouts and acquisitions. In the second quarter, 29 public listings worth €34.8 billion closed, increasing 314.3% and 148.4% year over year, respectively.
Pitchbook also said the zero-interest-rate environment, public market volatility and correlation, and the potential for significantly higher risk-adjusted returns from alternatives continued to fuel the confidence of limited partners. Fundraising volume as of June 30 stood at €59.6 billion, up from €22.1 billion as of March 31.
In the six month ended June 30, 2020, fundraising volume was €19.6 billion and 38 funds were closed.