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Private Equity News Ireland: Latest Updates and Insights

Private equity in Ireland has been experiencing exponential growth in recent years.

According to a report by PwC, assets under management in private markets in Ireland are expected to grow 14.2% (CAGR) on average per annum for the next five years, reaching approximately EUR 50bn in 2025, up from EUR 25bn in 2020.

Private Equity News Ireland: Landscape in Ireland

This growth is driven by private equity firms from the US and elsewhere with access to unprecedented amounts of capital, which has led to a surge in deal-making in the Irish market.

The Investment Limited Partnership (ILP) is the primary vehicle used for private equity investments in Ireland. They are regulated by the Irish Collective Asset-management Vehicles Act 2015 and are a popular choice for private equity fund managers and investors.

The ILP structure has been further enhanced by the Investment Limited Partnerships (Amendment) Act 2020, which provides more flexibility in terms of governance, capital commitment, and the ability to accommodate different types of investors.

Private Equity News Ireland Guide

In terms of deal-making, the Irish market has been very active in recent years. According to a report by Mergermarket, the total deal value in Ireland in 2020 was €19.3bn, with private equity-backed deals accounting for €5.5bn of that total. The report also states that the number of private equity deals in Ireland increased from 47 in 2019 to 63 in 2020, with a total deal value of €5.5bn.

Yearly Analysis of Private Equity in Ireland

According to Mondaq, despite headwinds, PE activity in Ireland in 2022 continued to be strong with a total of 62 transactions. In line with overall M&A, PE activity in Ireland failed to maintain the exceptional (or anomalous) levels of 2021, with deal volumes and values falling by 19% and 76% respectively, year-on-year.

Private Equity News Ireland Guide

In 2021, the UK & Ireland's private capital markets saw a blistering start to the year. With its record-breaking first quarter for both private equity and venture capital dealmaking, the UK & Ireland remained Europe's dominant region for private capital, according to PitchBook.

Looking at the future, new analysis by PwC forecasts that assets under management in private markets in Ireland are expected to grow 14.2% (CAGR) on average per annum for the next 5 years, reaching approximately EUR 50bn in 2025, up from EUR 25bn in 2020, as stated in a PwC press release.

Legislative Changes and Their Impact

Ireland has recently made significant legislative changes to its Investment Limited Partnership (ILP) structure. In December 2020, the Investment Limited Partnerships (Amendment) Act 2020 was passed, overhauling the original 1994 Act. These changes are set to have a significant impact on the private equity industry in Ireland to make the ILP structure more attractive to fund managers, particularly those based outside of Ireland. The changes include the introduction of a new sub-fund structure, which will allow for greater flexibility in the management of funds.

Private Equity News Ireland Guide

The amendments also aim to streamline the process of establishing an ILP and reduce the regulatory burden on fund managers. This is expected to make Ireland a more competitive jurisdiction for private equity funds, and attract more investment to the country.

The ILP structure is already a popular choice for private equity funds, with over €40 billion in assets under management in Ireland.

Private Equity Deal-Making in Ireland

Private equity deal-making in Ireland has been on the rise in recent years, with a record €11.9 billion invested across 39 deals in 2017, according to PitchBook.

This marks a sharp rise from the €3.73 billion invested in 2016. The Irish market has been particularly attractive to private equity investors due to its strong economic growth and favourable tax regime.

Private Equity News Ireland Guide

In terms of deal count, the 2022 UK & Ireland Private Capital Breakdown report by PitchBook shows that there were 88 private equity deals in Ireland in 2021, up from 80 in 2020.

The report also highlights that the median deal size for private equity buyouts in Ireland was €80 million in 2021, up from €70 million in 2020.

When it comes to exits, the same PitchBook report shows that there were 23 private equity exits in Ireland in 2021, down from 28 in 2020. However, the median exit size for private equity exits in Ireland was €100 million in 2021, up from €80 million in 2020.

Private Equity News Ireland : Role of US and UK in Irish Private Equity

Private equity in Ireland has seen a surge in deal-making in recent years, driven by private equity groups from the United States and elsewhere with access to unprecedented amounts of capital.

US investors have been particularly active in the Irish private equity market, with many of the largest deals involving US-based firms.

For example, Goldman Sachs has struck seven deals in Ireland using cash from a $2.5 billion private equity partnership fund it set up in 2017 with the sovereign wealth fund China Investment Corporation [1]. Similarly, Carlyle spun-out Melior Equity Partners has raised one of the largest private equity funds in Ireland, with commitments of €160m [2].

UK private equity firms have also been active in the Irish market, with many firms establishing a presence in the country to take advantage of the opportunities available.

For example, Finance Ireland, which is backed by the Ireland Strategic Investment Fund and US investment giant Pimco, recently lined up UK asset manager M&G Investments to fund its entry into the mortgage market and the purchase of Pepper Money's €200 million home loans portfolio [3].

Overall, US and UK private equity firms have played a significant role in the growth of the Irish private equity market in recent years. With access to unprecedented amounts of capital and a desire to invest in growing businesses, these firms are likely to continue to be important players in the market for years to come.

[1] https://www.irishtimes.com/business/2023/08/29/goldman-sachs-bought-uk-and-us-companies-using-chinese-state-funds/ [2] https://pe-insights.com/news/2022/04/12/carlyle-spun-out-melior-equity-partners-raises-one-of-the-largest-pe-funds-in-ireland-of-e160m/ [3] https://uk.practicallaw.thomsonreuters.com/7-614-9845?contextData=(sc.Default)

Private Equity News Ireland

Fundraising and Investment Trends

Private equity investment in Ireland has been on the rise in recent years, with the country emerging as a leading destination for alternative investments. According to a report by PwC, assets under management in private markets in Ireland are expected to grow by 14.2% on average per annum for the next five years, reaching approximately EUR 50bn in 2025, up from EUR 25bn in 2020.

In terms of fundraising, the UK & Ireland Private Capital Breakdown report by PitchBook shows that VC deal activity in 2022 is on track to match last year's record numbers with £15.4 billion invested across 1,879 deals in H1.

Private Equity News Ireland Guide

Capital raised by VC-backed companies in the UK and Ireland matched the pace set last year with £15.4 billion (around $15.3 billion) invested in H1—just over half of 2021's £28.2 billion total.

The report also shows that the median deal size in Ireland has increased significantly, from £1.5 million in 2016 to £3.8 million in 2021. This suggests that investors are becoming more confident in the Irish market and are willing to make larger investments.

Private Equity News Ireland

Overall, private equity investment and fundraising in Ireland are expected to continue to grow in the coming years, with the country well-positioned to attract both domestic and international investors. The updated Irish Investment Limited Partnership (ILP) structure is also expected to increase the number of Irish domiciled private equity funds, making it more competitive with Luxembourg in the private equity space.

Irish Private Equity Funds and Their Performance

According to PwC, assets under management in private markets in Ireland are expected to grow at a compound annual growth rate (CAGR) of 14.2% on average per annum for the next five years, reaching approximately €50bn in 2025, up from €25bn in 2020.

One of the largest PE funds in Ireland is the Carlyle Cardinal Ireland Fund, which was launched by Carlyle Group and Cardinal Capital Group in 2014. The fund closed on €295m of commitments and was focused on growth capital and buyout investments in small and medium-sized businesses in the UK and Ireland.

Private Equity News Ireland Guide

Another notable player in the Irish private equity market is Melior Equity Partners, which was spun out of Carlyle Group in 2022. The firm recently raised one of the largest PE funds in Ireland of €160m.

Private equity funds in Ireland have generated strong returns for investors, outperforming public markets in recent years. According to a report by the Irish Venture Capital Association (IVCA), the Irish private equity industry has delivered an average annual return of 15.2% over the past decade, compared to 8.2% for the ISEQ Overall Index.

Furthermore, the report notes that Irish private equity funds have consistently outperformed their European counterparts, delivering an average annual return of 14.8% over the past decade, compared to 11.1% for European private equity funds.

Overall, Irish private equity funds have demonstrated their ability to deliver strong returns to investors, making them an attractive option for those looking to diversify their portfolios and generate alpha.

Private Equity News Ireland - Frequently Asked Questions

What is the Cardinal Capital Group's involvement in Irish private equity?

Cardinal Capital Group is a private equity firm based in Dublin, Ireland. The firm has been involved in several private equity deals in Ireland, including the acquisition of a majority stake in the Irish energy company, ElectroRoute.

What is the future outlook for private equity in Ireland?

According to a report by Mergermarket, private equity funding may account for up to 25% of M&A funding in Ireland over the next 12 months. This indicates a positive outlook for private equity in Ireland.

Private Equity News Ireland