Chart of the Week: Mega funds return

 Mega-funds dominate the fundraising scene as investors seek brand-name managers   

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Over a third of total private equity fundraising in 2013 came from funds that closed on more than $5 billion of committed capital. Apollo Investment Fund VIII and Warburg Pincus Private Equity XI – both with a global remit – raised $18.38 billion and $11.2 billion respectively. Larger funds increasingly dominate the fundraising scene: in 2012 funds in excess of $5 billion comprised only 23 percent of the total capital raised.

 

Typically, ‘mega funds’ – defined as those in excess of $5 billion in size – have a global or North American focus due to the abundance of potential investment opportunities that such funds have. LPs have also indicated their desire for established markets. Hfo Hamburg family office, Flossbach Von Storch and Nordic Life and Pensions have told PEI’s Research & Analytics team that they intend to invest in Global and North America focused funds in 2014.

 

With the exception of the KKR Asian Fund II and the Georgian Co-Investment Fund, which both closed at $6 billion in 2013, no other emerging markets focused fund collected over $5 billion, highlighting the limited interest from LPs in emerging market focused funds.