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PE fundraising momentum picks up in Q2 2012

While the aggregate capital raised by private equity funds reaching a final close in Q2 2012 was similar to the Q1 total, the number of funds that have reached an interim close increased in Q2 from the previous quarter.

Preqin research also reveals that the average time taken for a private equity fund to close has declined from 18.5 months in 2011 to 16.7 in 2012 YTD, suggesting that some fund managers are finding success in attracting institutional capital.

A total of 145 private equity funds held interim closes in Q2, raising an aggregate USD48.5bn towards their overall fundraising targets, up from the USD33.7bn that was raised in interim closes in Q1.

There were 145 funds which held interim closes, garnering USD48.5bn towards their aggregate fundraising targets.

Funds closed in 2012 YTD have taken an average of 16.7 months to close.

A total of 126 funds reached a final close in Q2 2012, having raised an aggregate USD61.4bn. This is down slightly from Q1, when 167 funds closed on a collective USD68.1bn, but the Q2 figure is expected to increase somewhat as more information becomes available.

There were 65 US-focused funds which closed on USD34.8bn, while 28 Europe-focused funds closed on USD17.7bn and 33 Asia and Rest of World-focused vehicles attracted USD8.9bn in Q2.

AXA Private Equity closed the largest fund in Q2 2012, with its Europe-focused fund AXA Secondary Fund V attracting a total of USD7.1bn from investors.

Other funds to close in Q2 included the USD6.25bn buyout fund Green Equity Partners VI, and the USD3.635bn American Securities Partners VI.

There are currently 1,872 private equity funds in market, targeting a collective USD801bn. This is up from the 1,846 funds hoping to attract USD758bn that were in market in January 2012.

Warburg Pincus has the largest private equity fund in market by target size, with the 2012 vintage balanced fund, Warburg Pincus Private Equity XI, targeting USD12bn. The vehicle has already held an interim close in May 2012 on USD5bn.

“Private equity fundraising conditions remain extremely challenging for fund managers; however, momentum is starting to shift in favour of GPs,” says Richard Stus, manager – fundraising data. “The number and value of interim closes completed in Q2 2012, and the fact that funds are closing quicker on average than last year, shows that investors are still committing capital to funds. Ninety per cent of investor respondents to a recent Preqin survey plan to increase or maintain their allocations to private equity over the next 12 months, which also suggests increasing momentum in the market. The difficulty facing managers coming to market remains standing out from the record number of funds currently on the road. With the market so crowded, fund managers will have to work hard to ensure that they position their vehicles correctly and do their homework in targeting the right investors for their offering.”

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