10
Loading video...
By Francois Roux
0
Share
Newsweek is a Trust Project member
See more of our trusted coverage when you search.Prefer Newsweek on Googleto see more of our trusted coverage when you search.
Europe offers American private equity managers a significant pool of capital, but too many are approaching it as a single market, chasing the same large investors and mistaking a busy roadshow for fundraising progress.
That approach is expensive, inefficient, and ultimately self-defeating. The opportunity is real, but capturing it requires something American fund managers often underestimate: local knowledge, patience, and sustained relationships.
The timing could hardly be better. According to Aviva Investors’ 2026 Private Markets Study, 49 percent of institutional investors plan to increase their private markets allocations over the next two years.
Read More on Leadership Insights
Meanwhile, an IPEM roundtable held in New York in April 2026 highlighted that U.S. small and mid-market managers with established European relationships can raise between 20 and 40 percent of their capital from the region.
...
Europe Is Not One Market
The first mistake is assuming Europe is one market. It is not.
France, Germany, Switzerland, the Netherlands, Italy, and Luxembourg have different languages, business cultures, investment preferences, and decision-making processes. Even investors within the same category can behave very differently. A Dutch pension fund does not necessarily assess a fund like a French pension fund. A single-family office in Italy is not interchangeable with one in Switzerland.
Treating these investors as one pool of capital is a recipe for wasted effort. Fund managers must understand who makes investment decisions, what strategies investors favor, how much they can commit, and what evidence they require before backing an unfamiliar manager.
A European roadshow cannot replace that work.
I have seen American managers arrive in Europe with two or three senior partners, schedule 10 to 12 meetings in a week, and return home convinced they have made meaningful progress. Then nothing happens. The mistake is believing the meetings are the fundraising. They are merely the beginning.
According to France Invest and Grant Thornton’s 2025 study, highlighted by CFNEWS, French private equity fundraising took an average of 23.6 months, up from 20.9 months in 2024.
In practice, securing a commitment can require five or more meetings with an investor. Questions must be answered, data rooms updated, follow-up meetings arranged, and internal investment committees navigated. When the American partners board their return flight from Charles de Gaulle, the real work begins. Without someone maintaining momentum, those promising conversations can disappear.
There is also a practical obstacle that managers should address before entering the market: regulation. As explained by the European Commission, under the Alternative Investment Fund Managers Directive (AIFMD), non-European managers seeking to market funds in Europe must consider the appropriate regulatory arrangements, including access to an authorized AIFMD where required.
Leaving this until an investor is ready to commit creates unnecessary delays. Preparation signals seriousness; improvisation signals the opposite.
Beyond the Biggest Investors
The second mistake is chasing only the biggest institutions. The largest pension funds, insurers, and funds of funds are obvious targets, which is precisely why they receive so many approaches.
Meanwhile, a substantial network of mid-sized investors remains underexplored. Private pension funds, insurance companies, mutual societies, and family offices can often commit $5 million to $10 million per fund. Individually, these commitments may look modest. Collectively, 10 or 15 investors can build a substantial capital base while reducing dependence on a single large investor.
European investors have reasons to seek American exposure. The IMF expects the U.S. economy to grow around 2.3 percent annually in 2026 and 2027, roughly twice the pace of the euro area, while the European Commission has highlighted a widening productivity gap with the U.S.
The technology gap is particularly stark: Stanford’s AI Index 2026 puts U.S. AI investment at $286 billion in 2025, compared with $21 billion in Europe. American technology giants dominate Europe’s cloud market. U.S. data centre construction attracted $98.5 billion in spending in the first eight months of 2026, creating demand for industrial services, power equipment, and logistics.
The U.S. also leads in energy production. For European investors, specialist American funds offer access to these sectors and greater geographic diversification.
But appetite does not mean investors will overlook weak performance. In a market where exits remain difficult, investors want cash back, not just impressive valuations on paper. Distributions to Paid-In Capital (DPI) deserve particular attention. A strong Internal Rate of Return (IRR) means little to an investor still waiting for distributions.
Relationships Matter
American managers should therefore change their approach.
First, lead with realized returns, DPI, and a credible account of how liquidity will be generated. Second, build a carefully researched list of mid-sized investors across individual European markets instead of repeatedly approaching the same institutional giants.
Third, establish a consistent local presence, ideally with a senior partner who understands investor behavior and can maintain relationships long after the roadshow ends.
Managers who invest in local knowledge, regulatory preparation, and lasting relationships can build diversified European investor bases and unlock a meaningful new source of capital.
Those who continue treating Europe as a convenient stop on a fundraising tour will spend money, collect business cards, and wonder why commitments never materialize.
Europe is not closed to American private equity. But it will not reward managers who expect access without effort. Stop counting meetings. Start building relationships.
Francois Roux is the founder of Roux Capital, an independent Paris-based advisory firm specializing in private equity fundraising and secondary transactions. The views expressed are the author's own.
View 0 Comments
Submit Correction
View Editorial & AI Guidelines