Although the aggregate capital raised by private equity funds reaching a final close in Q3 2012 fell significantly from the previous quarter, this level of capital shows a large uptick in private equity activity compared to same quarter in 2011, according to Preqin.
The expectation is that Q3 2012 fundraising figures will increase by 10 to 20 per cent as more information becomes available.
The average time taken for private equity funds to close has increased slightly from 16.2 months in 2011 to 16.8 in 2012 YTD, suggesting that fund managers are still finding it difficult to attract institutional capital. A total of 131 private equity funds held interim closes in Q3 2012, raising an aggregate USD25.3bn towards their overall fundraising targets, down from the USD48.5bn that was raised through interim closes in Q2 2012.
131 funds held interim closes during Q3, garnering USD25.3bn towards their aggregate fundraising targets.
Funds closed in January to September 2012 have taken an average of 16.8 months to close.
122 funds reached a final close in Q3 2012, having raised an aggregate USD64.1bn. This is down from Q2, when 192 funds closed on a collective USD83.3bn, but the Q3 figure is expected to increase somewhat as more information becomes available.
52 US-focused funds closed on USD33.7bn, 22 Europe-focused funds closed on USD14.8bn, while 48 Asia and rest of world-focused vehicles attracted USD15.6bn in Q3.
Coller Capital closed the largest fund in Q3 2012, with its globally diversified secondaries fund Coller International Partners VI attracting a total of USD5.5bn from investors.
1,918 private equity funds are currently in market, targeting a collective USD796.5bn. This is up from the 1,892 funds hoping to attract USD822.7bn that were in market in June 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 previously held an interim close in May 2012 on USD5bn.
“The private equity fundraising environment continues to be a challenge for fund managers, with increasing average time on the road and reduced commitment levels from investors. “ says Richard Stus, manager, fundraising data, Preqin. “The USD64.1bn raised throughout Q3, however, demonstrates improved fundraising conditions compared to the equivalent quarter in 2011, as GPs are able to close on larger average fund sizes. Interim close levels remain buoyant, with 131 funds completing an interim close on an aggregate USD25.3bn in capital, showing that investors are still committing to private equity vehicles. Eighty-nine percent of investor respondents to a recent Preqin survey plan to increase or maintain their allocations to private equity over the next 12 months, which suggests that investors still have significant appetite for the asset class. Distinguishing themselves from the record number of funds currently on the road still remains the biggest difficulty facing fund managers coming to market.”
