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PE fundraising sees small improvement in 2012, says Preqin

Private equity funds that closed in the final quarter of the year raised USD74.6bn, a similar amount to the USD75.0bn raised by funds that closed in the previous quarter, according to data from Preqin.

However, Preqin expect the Q4 figure to increase by around 10 to 20 per cent and exceed the Q3 total as further information becomes available.

Q2 was the strongest quarter of 2012 for fundraising, with 212 funds reaching a final close having collected USD90.2bn in commitments. The total capital raised by funds that closed in 2012 was USD311.7bn, slightly larger than the USD311.0bn raised by funds that closed in 2011, although again Preqin expects the figure to increase further as more information becomes available.

Geographically, North America-focused funds were the most plentiful among those closed in Q4 2012, with 58 funds raising an aggregate USD44.3bn in capital commitments.

Real estate funds accounted for the largest proportion of capital raised of any fund type during Q4 2012, with 29 funds closing on a combined USD22.6bn.

Blackstone Real Estate Partners VII was the largest fund to hold a final close in the quarter. The global real estate fund raised USD13.3bn, and also was the largest fund to close across the whole year.

Buyout funds contributed the largest proportion of the aggregate capital raised throughout the year of any fund type; 104 such funds closed having raised a combined USD86.6bn.

Venture capital funds were the most numerous type of fund to cease fundraising; 167 reached a final close and collected an aggregate USD28.2bn.

On average, the length of time a fund spent in market increased slightly during 2012, from 16.2 months in 2011 to 17.0 months in 2012.

A record 1,949 funds are currently on the road seeking an aggregate USD797.1bn.

Fifty three per cent of investors plan to make new commitments in 2013, with a further 34 per cent that may invest opportunistically, according to a Preqin study undertaken in December 2012.

Eighty one per cent of investors are seeking a combination of re-ups and new GP relationships for future private equity commitments; this includes the 23 per cent of investors that are predominantly seeking re-ups.

“Fundraising continued to be very challenging in 2012, but the year ended with a slight improvement on the level of fundraising seen in 2011,” says Helen Kenyon, senior manager and Preqin spokesperson  “Since 2008, Preqin has seen the level of fundraising fluctuate around USD300bn each year, so it is positive to see the amount raised in 2012 surpass this. With a record number of funds on the road and with the time taken to raise funds increasing slightly, the market will remain very competitive during 2013. Yet investor appetite for the asset class has remained strong and with the majority of LPs satisfied with the performance of their portfolios, it is possible that we may see some further improvement in overall fundraising levels in the year ahead.”

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