Fundraising sees $122bn drop in the first half of 2022

Sizeable closes by large funds, including those by Advent International, Insight Partners and KKR, accounted for nearly 40% of capital raised for the period, as the number of vehicles closed sank to its lowest since 2017.

Private equity fundraising saw a substantial decline in the first six months of 2022 as managers struggled to adjust to a more challenging capital-raising environment.

Capital raised by private equity funds in 2022 dropped to $337 billion as of June, from $459 billion in the same period last year, according to preliminary figures from PEI. This includes closed-end funds, co-investments, separately managed accounts and joint venture vehicles.

The number of funds closed slid nearly 40 percent to 622, from 1,033 last year, as LPs continue to concentrate capital into a smaller number of larger funds.

The 10 largest funds that closed in H1 made up 39 percent of capital raised for the period. Advent International’s $25 billion haul for GPE X was the largest close, followed by Insight Partners’ $20 billion Fund XII and KKR’s $19 billion North America Fund XIII.

A crowded fundraising environment set against high levels of macro uncertainty has meant advisers have had to take a variety of approaches to get in on the action, PEI reported earlier this month. Global investment firm Cambridge Associates, for example, has planned more than 90 percent of its expected allocations for its mature portfolio. Most of this is weighted towards re-ups in 2022, Elisabeth Lind, managing director in the private client practice, said, adding that there are plans to reduce the commitment size.

North America-focused funds accounted for more than 40 percent of all capital raised in the first half. Multi-regional and Asia-Pacific funds made up 38 percent and 10 percent of capital respectively, while European strategies collected just 6 percent

There are some 4,055 funds in the market – up from 3,801 as of end-March – targeting $1.23 trillion between them. This compares with just $703 billion across 3,060 funds at the same point last year.

Approximately 17 percent, or $204 billion, of that amount is targeted by the 10 largest funds, which include Apollo Investment Fund X, Thoma Bravo XV and Carlyle Partners VIII – each seeking at least $22 billion for their latest offerings.

Article amended to reflect updated figures for funds in market.