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PE funds building

A NEW report estimates there is around $US6 billion ($A7.7 billion) of private equity funds likely to be invested in mining over the next 18 months to two years.

Staff Reporter
PE funds building

British law firm Berwin Leighton Paisner said $2 billion of PE funds had been injected into mining projects in 2014, comprising 50 investments by 30 different funds.

Half the funds were invested across 11 acquisitions with an average transaction size of more than $110 million.

A further 22 deals covering $380 million comprised the acquisition of strategic stakes in companies or projects, with an average size of 21%.

Gold was the most targeted commodity with 15 investments, followed by coking coal with six.

Copper, rare earths, silver and uranium and diamonds each attracted three investments.

North America saw the greatest value of deals, with more than $1 billion invested across 14 deals.

Around a quarter of investments were made in African mining projects, though they only accounted for 15%, or $302 million, of the capital deployed.

Australia attracted five investments for $358.4 million.

“While private equity fund was heralded of as a potential saviour of the mining industry, in part due to continuing falls in commodity prices, 2014 was another difficult year for the mining industry,” BLP partner and co-head of mining Alexander Keepin said.

“However, with $8 billion having been reported as being raised for private equity investment in the mining industry and over $2 billion invested in 2014, momentum is building and we can expect further, more significant private equity investment in the next 12 months.”

Owen Hegarty’s EMR Capital recently raised $450 million, while Mick Davis’ X2 Resources is sitting on a war chest of close to $5 billion.

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