The Return Of The Mega-Fund

The quantity of new private equity funds raised continues to decline, dropping from 422 in 2014 to 356 last year—that’s according to our 2016 Annual PE & VC Fundraising report, which was released on March 1.

Yet the percentage of those funds to exceed $5 billion in commitments continues to rise. There were 13 such funds closed last year, comprising 3.7% of all new buyout vehicles raised—the largest figure in any year since before the start of the financial crisis. In contrast, just 25% of new buyout funds last year closed with fewer than $100 million in commitments—the lowest figure since before the crisis.

Mega-Fund

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Mega-Fund

As you’d expect, the figures are much starker when considering those mega-funds in terms of capital raised. Those 13 new vehicles exceeding $5 billion combined to account for a whopping 38.4% of all new PE commitments in 2016, a jump from 30.7% the year before. One takeaway: Private equity’s largest, most established firms are finding it easier than it’s been in a decade to raise capital, while some of the industry’s smaller players are getting squeezed out.

For both the PE and VC universes, there’s lots more information where that came from in our latest fundraising report.

Article by PitchBook