Fundraising: Sky’s the limit

We’re only a few months into a new year, but the outlook for private equity fundraising in 2014 is already looking rosy.

While raising capital remains far from straightforward, there’s a lot more confidence in the air after last year – which was the best for fundraising since the onset of the financial crisis in 2008.

Private equity firms raised a combined $386 billion globally, up 28 percent on 2012 levels, according to Private Equity International’s Research & Analytics division.

Leading the way were North American-focused funds, which raised an impressive $124.5 billion in 2013, up from $89.9 billion in 2012. Although that’s lower than boom-era levels (the 2008 figure was $158 billion), it shows that the region remains the hottest private equity market in the world.

But it wasn’t the only one to benefit from increasing appetite for the asset class in 2013. Europe also came roaring back after a difficult 2012, with $42.7 billion raised by pan-European funds, up from just $13.5 billion in the previous year, and $36.9 billion raised specifically for Western Europe, up from $27.3 billion in 2012.

What’s more, the consensus from virtually all segments of the market is that LPs are likely to invest even more in private equity in 2014.

According to Bain & Company’s latest global private equity report: “The unmistakable signs of momentum that began to build in private equity fundraising in 2013 look primed to gather force in 2014, as GPs hungry for capital find LPs more open than they have been in years to provide it. Indeed, the dynamics that are coming into focus on the supply- and-demand front suggest that 2014 could be a year of transition, marking the end of one long private equity cycle and the start of a new one.”