Private equity fundraising has continued its downward trajectory, with firms globally raising just $592bn in the 12 months to June – the lowest annual figure since 2017, according to a report by the Financial Times citing Preqin data.
The decline highlights the deepening fundraising challenges facing the industry, despite a growing array of incentives aimed at attracting institutional capital.
Faced with reduced investor appetite, PE managers are increasingly offering fee breaks, early-commitment discounts, and other concessions in an effort to bring new capital into their funds.
Fundraising levels have fallen nearly 30% from their 2021 peak, amid a backdrop of elevated interest rates, reduced exit activity, and growing investor frustration over illiquidity. Many firms are struggling to exit portfolio companies and return capital to LPs – only 11% of industry assets were returned to investors last year, the lowest since 2009, according to Bain & Company.
The environment has been further complicated by a proliferation of managers entering the private markets over the past decade.
The increased competition has led to more aggressive fundraising tactics, with GPs offering to rebate transaction fees, implement volume-based fee reductions, and cap expenses such as legal and travel costs. Bain estimates that these enticements have cut net management fees by roughly 50% since the global financial crisis.
Industry hopes of a fundraising rebound in 2025 have yet to materialise. A report from Campbell Lutyens suggests that after years of limited distributions, LPs are now sharply focused on liquidity.
Recent US policy shifts have added further uncertainty. A survey by Campbell Lutyens in April found that 33% of LPs plan to slow private market allocations in the wake of new tariffs introduced by the Trump administration, with 8% pausing commitments altogether.
In Europe, the fundraising landscape has become increasingly congested, with several large-cap managers simultaneously in market. Advent International is reportedly targeting over $25bn for its next flagship vehicle, Permira is seeking approximately €17bn, and Bridgepoint is eyeing a raise of around €8bn. BC Partners, Astorg, and Inflexion are also actively marketing funds ranging from €3bn to €5bn. All declined to comment.
A July report from Raymond James noted that approximately 1,500 buyout funds are currently targeting $474bn in new capital. However, advisors caution that not all managers will succeed in hitting their fundraising targets.
