Private Equity Fundraising at Highest Value Since Financial Crisis
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Private Equity Fundraising at Highest Value Since Financial Crisis

preqin nfAccording to the latest data from Preqin, in the second quarter of 2013 private equity funds held final closings on an aggregate of $122 billion in commitments, the highest value since $171 billion was raised by funds in the fourth quarter of 2008.

The $122 billion was raised by only 154 funds, the lowest quarterly number in the last 10 years. However, an additional 155 private equity funds held an interim close in the second quarter securing $24 billion towards their final targets.

Private equity funds closed in Q2 took an average of 19.2 months to reach a final close, the longest amount of time since 2006.

The average size of private equity funds closed in Q2 was $800 million, the highest figure in the last 10 years. This was a result of several large fund closings and a lower number of private equity funds reaching a final close.

“Private equity fundraising was very strong in Q2, with the highest quarterly value raised since the onset of the financial crisis in late 2008. The fact that the average size of private equity funds closed was $800 million and experienced managers dominated the fundraising environment, shows that investors are increasingly looking to back fund managers with a demonstrable track record,” said Ignatius Fogarty, Head of Private Equity Products at Preqin.

Other notable facts:

  • The top 10 private equity funds closed in Q2 secured $67 billion, 55% of the total capital raised by the 154 funds closed in the quarter.
  • Warburg Pincus’s balanced fund, Warburg Pincus Private Equity XI, was the largest fund to close in the quarter, securing $11.2 billion.
  • 27 buyout funds held a final close in Q2 securing an aggregate $49 billion, more than double the $23 billion raised by buyout funds closed in Q1 2013, and the highest figure since $73 billion was secured in Q4 2008.
  • Silver Lake Partners IV was the largest buyout fund to close in the quarter having secured $10.3 billion, followed by Apax VIII which raised €5.8 billion.
  • 101 North America-focused funds closed in Q2 securing an aggregate $67 billion, while 25 Europe-focused funds secured $32 billion.
  • 13 Asia-focused vehicles closed in the quarter, raising an aggregate $9 billion, while 15 vehicles focused outside of North America, Europe and Asia secured $5 billion.
  • 26 first-time funds closed in Q2 securing an aggregate $5 billion, down from 39 first-time funds closing in Q1 2013 which secured an aggregate $7.5 billion.

“With 1,958 private equity funds on the road, coupled with the average time to reach a final close at its highest level in the period since 2006, fundraising for the second half of 2013 will remain challenging, especially for less experienced or first-time fund managers,” said Mr. Fogarty.

Preqin is a provider of information for the alternative assets industry, providing data and analysis via online databases and publications (www.preqin.com).

© 2013 PEPD • Private Equity’s Leading News Magazine • 7-2-13

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