If raising private equity capital has become more of a challenge during the coronavirus pandemic, no one seems to have told the mega-funds.

Buyout giant CVC Capital Partners collected €22 billion for its eighth flagship fund after around six months on the road last week. The vehicle is private equity’s second-largest fund ever in US dollars on an annual average exchange rate, as Private Equity International noted on Monday.

Tech specialist Silver Lake is also understood to have raised nearly $15 billion for its sixth flagship fund against a $16 billion target, sister publication Buyouts reported last week. The fund launched during the onset of the pandemic in the first quarter of this year.

Meanwhile, Paris-headquartered Ardian held the final close on its ASF VIII programme on $19 billion in May, representing the largest ever pot of capital for secondaries.

“There’s been a flight to quality as a result of coronavirus,” Mei-ni Yang, head of private equity and debt for Asia-Pacific at investor advisory firm Mercer, told PEI. 

“A slowdown in distributions has caused many LPs to rethink new commitments. Mega-funds aren’t necessarily the most attractive in terms of outperformance but they tend to have an established track record, longstanding co-investment relationships and the capacity to accept large amounts of capital.”

The pandemic does not appear to have deterred firms from launching mega-funds. In February Thoma Bravo unveiled its Fund XIV with a $16.5 billion target and BC Partners its European Capital IX vehicle with an €8.5 billion target, according to PEI data.

EQT has also come to market this year seeking €14.75 billion for EQT IX, as has Clayton, Dubilier & Rice, which is seeking $13 billion for Clayton, Dubilier & Rice Fund XI.

GPs and LPs have been shifting their meetings from the physical to the virtual in light of coronavirus travel restrictions. As of May, two-thirds of GPs surveyed by PEI were looking to carry their fundraise to an initially planned timetable, up from 38 percent of respondents in March.

Part of mega-funds’ appeal lies in the consistency of their returns, as smaller funds tend to have much wider dispersion of returns, according to a McKinsey report in February.

However, the best 5 percent of small-cap buyouts have delivered a 40 percent internal rate of return over the period, compared with 27 percent for super-cap funds.

“The downside risk in super- and mega-cap funds is less pronounced and as such the managers running these funds are viewed as a safe bet by investors,” said Matt Portner, a McKinsey partner who co-authored the report.

LP support for mega-funds has not been ubiquitous. Prior to the pandemic, concerns around an expected decline in returns from the largest buyout funds were driving investors into other parts of the private equity market, LPs told PEI in November, citing high valuations on entry, a dearth of large, high-quality acquisition targets and the onerous fee burden.

Look out for Private Equity International’s H1 2020 fundraising data in the coming week.