Investors prefer to place capital with well-known players

Preqin highlights that the private equity fundraising recovery started in 2010 in its Private Equity Spotlight report issued on June 2014. Fundraising trended upwards for the past 3 years reaching a $504.6 billion top in 2013. Investors believe that established firms can better navigate the post-crisis market environment, and they acted on such view by placing more capital with established players. The top 30 private equity firms raised 4 times more capital than first-time fund managers in 2013 and so far in 2014.

private equity fund raising Blackstone

Source: Preqin funds in market

Blackstone tops private equity capital raising

The top 30 private equity managers have raised $1.2 trillion in total over the past ten years, according to Preqin analysis. The top 5 names are large, global and well-known brands that have collected approximately 36% of the $1.2 trillion.

private equity fund managers Blackstone

Source: Preqin funds in market

Private equity investments will likely continue to grow. Some of the top 30 firms like Partners Group and The Carlyle Group LP (NASDAQ:CG) opened offices in India and Indonesia. The top 30 private equity managers have closed some Asia oriented funds successfully. In June 2014 alone, the top 30 firms are seeking funding on 85 funds with a $115.4 billion target.

More funds raised for buyouts

The top 30 private equity players have raised more funds in the buyout sector in 2013 and 2014. Real estate was the most common sector in 2011 and 2012. The real estate market recovery in the U.S. after the 2008 crisis drove appetite for real estate vehicles. Investors saw opportunities to benefit from improving property prices and availability of financing. Distressed equity also increased its share of capital obtained in 2012 as private equity managers sought opportunities in Europe during its sovereign debt crisis.

Blackstone Private equity managers fund raised

Source: Preqin funds in market

Fundraising periods last 20 months or less

Since 2008, the top 30 private equity managers have taken between 13 and 20 months to gather investors’ capital. Smaller firms have shortened their fundraising time from 18 to 16 months in 2014. The difference in fundraising time between a top 30 firm and other partnerships is at its widest level since 2008. Private equity managers believe that a short to medium term fundraising period is conducive to meeting capital targets.

Blackstone  Private equity fund managers vs. others

Source: Preqin funds in market