The size of the average private equity fund hit $671 million in the second quarter of 2014, reflecting the fact that more capital is being invested in fewer managers, notes Preqin in a recent report.

Preqin, in its Q2 2014 report on Private Equity, highlights that the increased average fund size evidences a continuation of trend witnessed in the private equity fundraising market last year.

Private equity buyout raised most capital

According to the Preqin report, private equity funds closed in 2Q 2014 secured an aggregate $132 billion, which is $28 billion more than was accumulated in the first quarter. However, the number of funds remained low, with only 197 funds holding a final close in the second quarter. The report highlights that this is the lowest number of funds to close in any quarter since Q3 2010, which can be seen from the following graph:

PE Fundraising since 2009

Slicing and dicing the data based on the fund type, the report highlights that buyout funds raised the most capital in the second quarter. This is set forth in the following graph:

Dominance of buyout

The Preqin report highlights that the most notable fund of Q2 2014 was Ardian Secondary Fund VI, which not only is the largest private equity vehicle to reach final close in this quarter, but also the largest secondaries fund to close in history. The report notes the success of this fund, which surpassed its original target by $2 billion, further signifies the momentum of the burgeoning private equity secondaires sector. The following table captures the five largest PE funds that closed in the second quarter:

Largest PE funds closed in Q2

Record Private equity dry powder

The Preqin report notes that in tandem with the growth witnessed in the amount of capital raised by fund managers, the level of private equity dry powder also grew, with a record $1.16 trillion available for investment as of July 2014. This represents an 8% increase from December 2013, as can be deduced from the following graph:

Record dry powder

The report also highlights that the amount of capital distributed to investors witnessed a significant surge last year. As captured in the following graph, in 2013, LPs received $568 billion in distributions, the highest level of distributions ever witnessed from private equity investments:

Record distribution

Substantial growth in Europe deal value

Furthermore, the second quarter of 2014 witnessed 766 private equity backed-buyout deals, with an aggregate value of $80 billion. Europe witnessed significant growth with the total value of deals up 71% compared to the first quarter.

PE backed buyout deals

Riding high on the current strong exit environment, there were 394 private equity-backed buyout exits globally in Q2 2014.

PE-backed exits

Preqin also notes that Q2 2014 was the most successful quarter to date for venture capital deals, recording the highest aggregate deal value witnessed in a quarter since Q1 2007.