Europe’s private equity sector is bracing for a potential shake-out as the largest buyout firms aim to raise unprecedented amounts of capital next year, according to market sources and reporting by the Financial Times.
This year, six major funds targeting €3 billion or more are expected to secure combined commitments of roughly €34 billion, according to advisory firm Campbell Lutyens. Next year, however, the number of big funds entering the market is expected to rise to 10, collectively seeking over €110 billion — more than three times this year’s total.
The ambitious fundraising goals may force investors to make tough choices, potentially leaving some funds undersubscribed. “It will be a tale of haves and have-nots,” said Sunaina Sinha Haldea, global head of private capital advisory at Raymond James. “Undoubtedly, [it] will be a very tough year for European fundraisings next year when almost all the major houses will have their flagship strategy out.”
Fundraising in Europe has already slowed compared with the sector’s peak years. “These processes often take twice as long as they used to,” said Ali Floyd, co-head of European private equity fundraising at Campbell Lutyens. He noted that some buyout firms have postponed raising new funds because investors are demanding returns from prior commitments first. “Often investors will say, ‘Yes I’m happy to support your fundraising but I want my money back first,’” Floyd said.
One factor contributing to the slowdown is a challenging market for initial public offerings (IPOs), which has hampered large buyout firms’ ability to exit investments and return cash to their backers. Naguib Kheraj, chair of London-listed Petershill Partners — which owns minority stakes in private equity firms — attributed the group’s share price weakness to investor caution amid these difficulties. Petershill recently announced plans to delist and return more than $900 million to investors. “All the noise around the difficulty of realising positions has made investors cautious,” Kheraj told the Financial Times.
Among the €3 billion-plus buyout funds that have closed or are expected to close this year are vehicles managed by Hg, Ardian, and Oakley, according to sources familiar with the matter. Other large funds, including Permira’s €17 billion vehicle and Nordic Capital’s €10 billion fund, will continue fundraising into 2026. Advent, which launched a $26 billion fund in February 2025, also expects its process to extend into next year. Next year’s market will also see new funds from Cinven and PAI, industry insiders said.
The expected congestion is likely to push investors to become more selective, scrutinizing comparative performance closely. “The competitive environment would shine a very, very bright light on comparative performance,” Floyd said. He added that institutional investors approached by so many large managers may have less capital available for smaller European funds.
Hg, Ardian, Oakley, Advent, Nordic Capital, Permira, Cinven, and PAI declined to comment on their fundraising plans.
With demand for capital outstripping supply of investable funds, the European private equity sector faces one of its most challenging fundraising years in recent memory, highlighting both the opportunities and risks for investors seeking returns in a market still reeling from IPO difficulties and broader macroeconomic pressures.
