We broke the news earlier this week that Affinity Equity Partners, a spin-out from UBS Capital Asia, had surpassed its $5 billion target to raise its largest-ever fund. The fundraise tells us a lot about the state of the market today – below we provide some reasons why.

It was fast

Affinity began fundraising in August and held a first and final close in mid-December – 10 months faster than the 14 months it took to raise its fourth fund in 2013. Similarly , when KKR raised the largest Asia-focused private equity fund last year at $9.3 billion, it did so in fewer than seven months. Silver Lake raised $15 billion last year for tech deals in just four months, while the largest-ever PE fund, the $24.7 billion Apollo Investment Fund IX, was raised in six. Europe also saw swift fundraises: CVC Capital Partners hauled in more than $18 billion for the region’s largest buyout vehicle in just five months. Forty percent of funds closed last year were ‘one-and-dones’, completed without any interim fund closes.

It was a jump up in size

The vehicle is about 60 percent larger than its $3.8 billion predecessor, which is 70 percent invested. This is partly attributable to Fund IV’s strong performance: it is showing a 1.84x net multiple and a 31 percent net IRR, according to LP documents. The jump in fund size is also symptomatic of the wider market; the size of the average fund raised in 2017 was $818 million, while in 2013 the average was $533 million, according to PEI data.

It features a large Japanese LP

The inclusion of Japan Post Bank among the LP base is a sign of the times. Since establishing its private equity arm in 2015, the $1.9 trillion investor has ramped up its push into alternatives. It had ¥58.9 billion ($524 million; €435 million) in alternative investments in September 2016, but by the end of March 2017 that had grown to ¥607.3 billion, according to its annual report.

Japan Post Bank is the first mover and most aggressive among Japanese LPs, but is expected to be joined by more of Japan’s institutional giants.

Demand outstripped supply

Fund V generated $9 billion worth of interest, with Affinity having to turn away some LPs and cut back others’ allocations, a source familiar with the fundraising tells PEI. Increasing demand for products from established managers was a theme of our LP Perspectives Survey 2018, which found 88 percent of respondents planned to maintain or increase their allocation to private equity in the next 12 months.

When we made our predictions for 2017, we gingerly suggested fundraising might slow slightly. We were wrong; according to PEI fundraising numbers, the total raised for 2017 will be circa $417 billion, surpassing 2016’s $364 billion and nearing 2008’s $433 billion.

Perhaps we should be less bearish this year.

PS. Today is the last day of voting in the 2017 PEI Awards, so if you have yet to cast your votes, we urge you to do so!