Q3 2015 Sees Fewest Private Equity Funds Closed Since Start Of 2006 by Preqin
170 private equity funds held a final close in Q3 2015, 46% down from the previous quarter, and the lowest number of closes in a quarter for ten years
Global private equity fundraising saw a further slowdown through the third quarter of 2015. One hundred and seventy funds closed, down from 317 in Q2 2015 and 290 in the same period last year. The aggregate capital raised by funds closed in this quarter was $116.9bn, down from $129.3bn in the previous quarter. It was the third consecutive quarterly decline in fundraising, and represents a 29% decrease from the $164.9bn raised in Q4 2014, the most recent fundraising peak. In 2015 YTD, private equity funds have raised an aggregate $385.4bn, down from $388.1bn in the first three quarters of 2014.
The Electron Global Fund was up 2% for September, bringing its third-quarter return to -1.7% and its year-to-date return to 8.5%. Meanwhile, the MSCI World Utilities Index was down 7.2% for September, 1.7% for the third quarter and 3.3% year to date. The S&P 500 was down 4.8% for September, up 0.2% for the third Read More
Other Key Private Equity Fundraising Facts:
- Interim Closes: In addition to the aggregate capital raised by funds that have held final closes in the quarter, 125 funds held interim closes, raising an aggregate $20bn.
- Time on the Road: Private equity funds closed so far in 2015 have taken an average of 16.3 months to reach a final close. This figure has risen slightly from Q2’s 16.2 months, but is still below the average 16.7 months that it took for funds closed in 2014 to fundraise.
- Buyout Recovery: North American buyout fundraising recovered from a weak Q2, raising $17.7bn in Q3. European buyout fundraising increased from $13.4bn last quarter to $20.4bn in Q3, taking overall buyout fundraising to $47bn globally.
- Growth in Asia: Forty-five private equity funds focused on Asia and Rest of World closed in Q3, raising a combined $22.5bn. This is an increase from the $10.7bn raised by 51 funds focused on these regions in Q2.
- Fundraising by Fund Type: After 3 funds raised $11.7bn in Q2, only $0.5bn was raised by a single secondaries fund in Q3. Fundraising totals for venture capital, real estate, and funds of funds all decreased, while infrastructure fundraising rose from $4.4bn in Q2 to $13.1bn in Q3.
- Biggest Fund Closes: The largest fund to close in Q3 2015 was the Sweden-based buyout fund EQT VII, on €6.75bn. Other notable closes included ArcLight Energy Partners Fund VI, which closed in $5.575bn, and TA Associates’ fund TA XII, which closed on $5.3bn.
- Funds in Market: The number of private equity funds in market is currently at a record high. 2,348 funds are seeking a combined $831bn in commitments, up from 2,248 funds seeking $781bn at the end of last quarter.
- Dry Powder: Dry powder levels have not continued the rapid increase seen through H1 2015, and currently the overall figure stands at $1.35tn.
“The global private equity fundraising market has continued to stall in the third quarter of 2015. The number of funds closed is the lowest of any quarter Preqin has on record, and aggregate fundraising totals declined for the third consecutive quarter. Despite recent turmoil in Asia, there has been an increase in fundraising for funds focused on the region, and on Rest of World. This, though, does not offset a lack of growth in the mature North American and European markets, as both the number of funds closed and aggregate capital figures continue to fall there.”
Christopher Elvin – Head of Private Equity Products, Preqin