Private equity funds closed in 2013 secured the highest amount of capital in any year since the global financial crisis; the previous high point was when $688 billion was raised by funds closed in 2008.
Preqin’s research shows that this growth in capital raised has been led by strong fundraising activity for North America- and Europe-focused funds, while funds focused on Asia and other regions have seen a significant drop in fundraising levels.
From recent discussions with limited partners, Preqin found that the greatest proportion of investors (59%) felt Europe offers the best private equity investment opportunities in the current financial climate, compared with 54% that feel similarly towards North America, 22% towards Asia and 11% towards other regions. This is the first time investors have felt Europe offers the best private equity opportunities since Preqin began tracking this information.
“From Preqin’s latest conversations with investors, limited partners seem to be focusing their attention on developed markets in the current climate. As developed economies begin to emerge from the global financial crisis, investors are seeking safer destinations for their capital with the anticipation that this will bring noticeable improvements in returns,” said Ignatius Fogarty – Head of Private Equity Products, Preqin. “North America has witnessed the biggest gains in fundraising this year, which was coupled with a buoyant buyout deals and exit market. Europe has also seen improved conditions, with investor appetite for the region growing significantly according to Preqin’s latest investor survey; 59% of respondents feel the region offers the best investment opportunities in the current market, compared to 37% of respondents in December 2011.”
Other Key Facts from Preqin:
- North America-focused private equity funds that reached a final close in 2013 raised $266 billion, a 33% increase on the $200 billion raised by funds that closed in 2012. Capital raised for funds targeting regions outside of Europe and North America totaled $61 billion in 2013, down from $86 billion the year before.
- On top of the $150 billion raised in Q4 2013 by funds holding final closes, a further $33 billion was raised through 147 private equity funds holding interim closes throughout the quarter.
- 28% of investors interviewed in December 2013 felt that Asia and other regions outside of North America and Europe offer the best investment opportunities in the current financial climate. This is down from 43% that felt the same in December 2012.
- Carlyle Partners VI was the largest fund to close in Q4 2013, having raised $13 billion, and it accounts for almost 60% of capital secured by North America-focused funds closed in the quarter. CVC European Partners VI was the largest fund to close throughout 2013, raising €10.5 billion ($14 billion) in capital commitments.
- A record 2,084 private equity funds are in market as of January 2014, seeking to raise an aggregate $750 billion. In comparison, 1,949 funds were seeking $797 billion in commitments at the start of 2013.
Preqin is a source of information for the alternative assets industry, providing data and analysis via online databases, publications and customized data requests (www.preqin.com).
© 2014 PEPD • Private Equity’s Leading News Magazine • 1-13-14
