CHART: Largest funds in market target $127bn

Vehicles by Hellman & Friedman, KKR and EQT are among the 10 largest in market as of mid-February, PEI data show.

The 10 largest funds in the market as of mid-February this year are targeting $127 billion in total, PEI data show.

That’s nearly $20 billion more than the amount targeted by the 10 largest funds around this time last year, amid remote working and travel restrictions.

Six of the top 10 funds have a multi-regional focus and target mid- to large-cap companies.

Hellman & Friedman tops the list with the largest capital-raising target. The San Francisco-based firm is seeking up to $20 billion for its 10th flagship offering, according to 16 February investment committee meeting materials prepared for the Minnesota State Board of Investment. It will invest between $400 million and $4 billion of equity in mid to large companies.

KKR has two funds in the list. KKR North America Fund XIII has a target size of $12.5 billion, according to MSBI documents, and could raise as much as $14 billion, as sister title Buyouts reported. The private equity firm will make up to 30 upper mid-market transactions from the vehicle. Ticket sizes are in the $300 million to $5 billion transaction value range.

It is also on the fundraising trail with the largest-ever fund for Asia. KKR gathered at least $13.1 billion of total commitments across KKR Asian Fund IV and its parallel funds as of October, surpassing its $12.5 billion target. The firm is yet to hold a final close on the vehicle.

Sweden’s EQT also has two funds in the list: EQT IX, its flagship PE fund targeting €14.75 billion, and EQT Infrastructure V, which has a €12.5 billion target. The firm had raised €14.6 billion by the end of last year for its ninth flagship fund, according to its 2020 year-end report.

While most LPs are willing to take a first meeting with a GP virtually, committing capital is another matter. More than half of LPs are less likely to invest with a new GP in light of covid-19, according to Private Equity International‘s LP Perspectives 2021 Study.

“A very small number of LPs are willing to invest with people that they have never met at all,” James Coleman, founder of Quest Fund Placement, told PEI in December. He added that the majority are willing to invest with those who they have met previously and only complete the fundraising process virtually.

“Obviously, this dramatically works in favour of established groups or those that have built out significant LP relationships in recent years.”

LPs that want more than just re-ups would have to change their historical rules and do an on-site over Zoom, noted Andrew Bernstein, senior managing director and head of private equity at Capital Dynamics.

“I think we are all hopeful that by fall we will start to see investors take a different attitude on capital commitments if physical on-sites are still not feasible by then,” he said.