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Private equity funds raised $163.9 billion in the first quarter, down 19 percent from the same period last year and a 35 percent decrease compared to Q1 2021, PEI data shows.
LP capital also appears to be becoming more concentrated, with only 204 funds closed in the quarter. A total of 1,615 funds closed in 2022, averaging about 400 per quarter, which sets this year on track to finish well below last year’s record.
The geographic distribution of capital has shifted dramatically. In the first quarter of last year, capital raised for Asia-Pacific was $10 billion more than in Europe. However, APAC’s contribution to fundraising this quarter fell below historical norms – with just $2.2 billion raised, or 1.3 percent of the global share. Comparatively, the region received 13.3 percent of all capital raised in 2021 and 8.3 percent in 2022.
Europe fundraising was 10 times that of APAC in Q1 2023, with $22.5 billion raised, and 14 percent of the global total.
APAC’s slowdown has been driven in no small part by diminished LP appetites for China’s private equity market. Due to geopolitical tensions, regulatory uncertainty and protracted pandemic disruption, funds with significant exposure to the region’s largest market are having a much harder time raising capital.
Buyouts continued to take the lion’s share of the market, with over half of the total capital raised in Q1 2023 attributed to the strategy. Given that Blackstone‘s Strategic Partners Fund IX closed on $22.2 billion, secondaries represented an unusually high 19 percent of total capital raised.
As of 21 April, a total of 4,316 funds were seeking $1.24 trillion globally, with eight funds pursuing north of $20 billion apiece, including CVC Capital Partners IX (€25 billion) and Apollo Investment Fund X ($25 billion).