Fundraising cools off in 2014

Capital raised for 2014 is likely to fall short of 2013’s bumper fundraising figure

Following a steady rise in fundraising post-crisis, culminating in a bumper 2013, the amount of capital raised globally for private equity in 2014 trailed off slightly, according to data from Private Equity International’s Research & Analytics division.

Fundraising for the year totalled $375.3 billion across 666 funds, down from $430.8 billion across 732 funds the previous year. The largest fund raised in 2014 was Hellman & Friedman’s Capital Partners VIII, which closed on $10.9 billion in November.

After the giddy heights of 2008, when 907 funds raised $538.2 billion, fundraising plummeted to $249.4 billion in 2009, and has been steadily creeping up in recent years. Although figures are currently down for 2014, around 15 percent of closed funds are still to be revealed, following which the final figure could well come close to 2013’s.

Capital raised for pan-European focused funds showed the biggest drop from 2013, down to $18.5 billion from $68.3 billion. Fundraising for Central and Eastern Europe also took a hit, dropping to $1.8 billion from $11.3 billion in 2013. However, figures were up for funds investing in Asia-Pacific, Latin America and North America.

Firms focused on the Asia-Pacific region raised $36 billion in 2014, up from $29.8 billion in 2013. However, as Vince Ng, partner at Atlantic Pacific Capital in Hong Kong, told PEI recently, it’s by no means certain that 2015 will see as many fund closes.

“A lot of pan-Asian funds have done very well, but whether that is sustainable going forward or in the next round of fundraising is [unclear]. For 2015, how many pan-Asian funds will be in the market? I’d imagine a lot less that what we’ve seen in the last year and a bit,” Ng said.

Despite fundraising for buyout-focused funds decreasing globally, North American buyout funds showed a substantial increase in capital raised, up from $57.7 billion in 2013 to $80.4 billion in 2014. This figure was bolstered by Clayton, Dubilier & Rice’s Fund IX, which closed on $6.43 billion, Vista Equity Partners’ Fund V, which closed on $5.78 billion, and Onex Partners’ Fund IV, which closed on $5.66 billion.

Fundraising for venture capital and growth equity focused funds globally was also up, increasing from $66.3 billion in 2013 to $74.2 billion last year, while funds of funds and co-investment vehicles saw a drop from $37.4 billion in 2013 to $18.9 billion in 2014.

2014 was a stellar year for secondaries, with a significant increase in capital raised for this strategy from $20.6 billion in 2013 to $25.1 billion, a figure substantially boosted by the close of the largest ever secondaries fund, Ardian’s $9 billion Secondary Fund VI.