Another healthy year of fundraising is underway in the private equity industry as 482 closed-ended funds gather $299.1 billion in the first three quarters of the year. A strong first half of the year has aided 2016 fundraising, despite the lowest amount of capital raised in the third quarter since 2011.
As the average size of funds continues to creep higher year-on-year, investor sentiment for 2017 suggests that many LPs are now looking to increase the number of relationships they share with fund managers. In contrast to previous fundraising reports, in which the consolidation of capital was a key trend in the industry, this presents a distinct turnaround in the investment approach.
Funds in market have also undergone a change this quarter. For the first time in years, the number of vehicles on the road and the total amount targeted have fallen when compared with the same point in the previous year. Secondaries funds, and mezzanine and debt vehicles were the only strategies to show a growth in number against 1 October 2015.
Additionally, in the ‘Country in Focus’ section on page 8 the report discusses developments in South Korean fundraising, where new measures introduced by the Korean Government have created greater potential for fund managers targeting the country to attract capital in the future.
Arne Vagn Olsen, chief investment officer at Stapi lífeyrissjóður, provides our LP interview this quarter. He talks to us about the pension fund’s approach to investing in the current market climate, the importance of a GP’s operational and value creation experience and why the fund does not pursue co-investment opportunities.