In Q3 2014, 185 private equity funds held a final close and secured an aggregate USD73bn, a figure which is expected to increase by 10 to 20 per cent as more information becomes available.
This is the lowest quarterly amount of capital raised in three years, when USD66bn was secured by funds closed in Q3 2011, according to Preqin.
Despite this, fundraising for the whole of 2014 is still likely to be strong following USD111bn raised by funds closed in Q1 and USD143bn in Q2.
Buyout fundraising was down in Q3 2014; 37 buyout funds closed during the quarter securing an aggregate USD31bn, down from 49 funds in Q2 2014 that secured an aggregate USD63bn. Interestingly, no mega buyout funds closed during Q3 2014; however, seven mega buyout funds are currently in market seeking an aggregate USD56bn. This includes Blackstone Capital Partners VII, TPG Partners VI and Hellman & Friedman VIII, which are all targeting over USD8bn.
“This quarter’s private equity fundraising fell short of the USD100bn mark for the first time in over a year, with the lack of mega buyout funds closing undoubtedly a factor that contributed to these lower fundraising figures,” says Christopher Elvin, head of private equity products at Preqin. “However, the third quarter of the year is typically a quieter one for the industry, and with several mega funds currently in market, fundraising is likely to pick up again towards the end of the year. It is also encouraging to see first-time funds accounting for a greater proportion of capital than earlier in the year, with investors’ confidence in emerging managers continuing to increase.”
