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North American Venture Capital Funds Raise $10.6bn In 2Q15

North American Venture Capital Funds Raise  $10.6bn In 2Q15 by Preqin

A total of $10.6bn was raised through the second quarter of 2015 by funds looking to make venture capital investments across North America, compared to $7.7bn raised by buyout funds.

Venture Capital

The global private equity fundraising environment continued to be slow during the second quarter of 2015, with the lowest amount of capital raised since Q1 2013. A total of 220 funds raised an aggregate $104.7bn globally, down from the 237 funds that closed over the first quarter that raised $128.7bn. Within the North American market specifically, however, fundraising for venture capital funds exceeded that for buyout funds, which has only happened once before in Q1 2012. Furthermore, the $10.6bn raised by North America-focused venture capital funds is the highest quarterly amount ever raised for vehicles of this strategy.

Venture Capital

Other Key Venture Capital Fundraising Facts:

  • Interim Closes: On top of the $104.7bn raised in Q2 2015 by funds holding final closes, a further $43.4bn was raised through 149 private equity funds holding interim closes throughout the quarter.
  • Time on the Road: Private equity funds closed so far in 2015 have taken an average of 16.2 months to reach a final close, falling slightly from the average 16.7 months that it took for funds closed in 2014 to fundraise.
  • Notable Strategies: Within the North American market, a number of other strategies beyond venture capital raised more capital individually than buyout funds over the second quarter of 2015. This included secondaries ($11.7bn), real estate ($10.0bn), and natural resources ($9.0bn).
  • Fundraising by Region: North America-focused funds attracted 65% of global capital raised in the first quarter of the year, whereas Europe-focused funds accounted for 25%.
  • Largest Funds: The largest fund to close in Q2 2015 was Lexington Capital Partners VII which raised $10.1bn in institutional capital. This is followed by the $6.5bn EnCap Energy Capital Fund X.
  • Funds in Market: There are a total of 2,248 private equity funds currently in market seeking $781bn in capital. This number is slightly higher than the 2,206 funds that were on the road as of the end of Q1 2015, but the aggregate target is lower than the aggregate target of $810bn.
  • Dry Powder: Committed capital that is yet to be invested, or dry powder, has jumped up even further over the first half of 2015 and now stands at over $1.3tn globally.

Venture Capital

Comment:

“The global private equity fundraising market has slowed further over the second quarter of 2015. Both the total number of funds closed and the amount of capital raised are lower than those for the first quarter of the year, and the amount of capital raised is the lowest amount seen for over two years. Yet within the North American market, fundraising for venture capital funds is particularly buoyant. Not only is the $10.6bn raised a record over a single quarter, but the amount exceeds fundraising for buyout funds, which has only happened once before in Q1 2012.”

Christopher Elvin – Head of Private Equity Products, Preqin

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