According to Preqin, a total of 187 private equity funds held a final close in Q2 2014 securing aggregate capital commitments of $127bn, a figure which is expected to increase by 10-20% as more information becomes available. Aggregate capital secured by private equity funds was higher compared to the $104bn secured by funds closed in Q1 2014 and has remained above the $100bn mark for the fourth consecutive quarter, although the quarterly number of funds closed continues to slide.

Private equity fundraising

The average size of funds closed in Q2 2014 stands at $680mn, the highest ever quarterly figure. Furthermore, private equity funds closed in Q2 2014 spent an average of 15.6 months in market, a marked decreased compared to funds closed in Q1 2014, which took an average of 16.4 months to close and the lowest figure since an average of 14.5 months for funds closed in 2008.

Private equity fundraising

Private Equity Fundraising: Other Key Facts

  • Interim Closes: An additional $29bn was raised through 143 private equity funds holding interim closes throughout Q2 2014.
  • Fundraising Success: 53% of funds closed in Q2 2014 exceeded their fundraising target, while a further 24% met their fundraising target.
  • First-time Funds: First-time funds closed in Q2 2014 accounted for just 7% of total capital raised by private equity funds closed during the quarter, up slightly from 5% for first-time funds closed in Q1 2014.
  • Fundraising by Region: 107 North America-focused funds held a final close in Q2 2014 securing an aggregate $69bn (54% of total capital). Europe-focused funds secured $39bn (32%), while Asia-focused funds secured $17bn (13%).
  • Buyout Fundraising: 40 buyout funds closed in Q2 2014 securing an aggregate $60bn (48% of total capital).
  • Largest Funds: The largest fund to close in the quarter was secondaries fund Ardian Secondary Fund VI, which held a final close on $9.0bn.
  • Funds in Market: A record 2,176 private equity funds are currently in market seeking an aggregate $739bn, compared to 2,098 funds that were looking to raise $733bn at the start of 2014.
  • Dry Powder: Dry powder for all private equity funds stands at an all-time high at $1.2tn, up from $1.1tn in December 2013. Dry powder solely for buyout funds is at $447bn, the highest figure since $482bn in December 2008.
  • For more information and analysis, please see the factsheet that follows.

Private equity fundraising

Private equity fundraising

Comment:

“The amount of capital being placed with private equity funds remains high, with quarterly aggregate fundraising remaining above the $100bn mark for the fourth consecutive quarter. Despite this, investors remain extremely selective and continue to place larger amounts of their capital with fewer managers. The result is growing disparity in the private equity industry, with well-established fund managers that have a proven track record able to secure significant amount of capital in a short space of time, while less experienced managers are finding it harder than ever to attract investor commitments.”

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