Private Equity International (PEI) revealed that, in the first quarter, $69.3 billion was raised by 130 private equity funds globally. The funds raised in the first quarter are similar to the $73.7 billion raised on an average in each quarter of 2012. However, the amount raised exceeds the fund targets of $59.9 billion.
Private Equity International, which is the leading information provider for global private equity, released its quarterly report on global fundraising data. As per the press release from PEI, buyout funds contributed about half all private equity closed funds, and the figure was close to the quarterly average of $34.25 billion in 2012. The most popular funds were those focused on investment in North America, raising $23.3 billion, marginally higher than quarterly averages in the previous four years. Funds that invest globally raised $18.8 billion, compared to averaged quarterly fundraisings of $31.8 billion in 2012.
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Cinven’s ‘The Fith Cinven Fund’ was the largest fund close in the quarter, raising $6.5 billion for pan-European investment. U.S. based EnCap Investments, which focuses on investment in oil and gas, and Highbridge Principal Strategies raised $5 billion each. Venture capital and growth equity funds also gave stronger results, raising $17.9 billion against the targeted capital of $14.5billion.
Amid all the encouraging news, the performance of distressed and secondary funds was lower to that in 2012. Distressed funding raised $1.2 billion against q total of $15.3 billion in the preceding 12 months, while secondary funds collected $2.1 billion compared to $20.8 billion in 2012.
Confidence also looks to be returning among private equity managers, with seven funds aiming to raise at least $10 billion. Three of those, Apollo Global Management LLC (NYSE:APO), TPG, and Warburg Pincus are aiming to invest $12 billion globally.
Funds that focus on Asia-Pacific are also showing encouraging signs. Whereas in 2012, $34.6 billion was closed by general partners (GPs) with funds targeting the region, currently there are 417, with almost a third of all funds in the market aiming to collect $195 billion.
As per the director of Research and Analytics at PEI, although the funds raised exceeded expectations they are still nowhere near the pre-crisis level. The director added that the strong first quarter figures are improving the confidence of managers with a strong track record and encouraging them on ample opportunity ahead.
Fundraising activity has been gradually improving since 2009 along with the number of funds in the market. “The example of Asia-Pacific demonstrates neatly the disparity between what funds have raised in recent years and what they are aiming for now,” says Dan Gunner.