Private equity fundraising grows by 10%

Data from Private Equity International shows buyout funds continue to be the most popular vehicles among limited partners – raising more than $130bn in 2012 compared to $88.1bn in 2011.

Private equity firms raised more than $264 billion in 2012, a 10 percent improvement over the previous year’s total, according to Private Equity International data released this month. 

The $264.9 billion total is the largest commitment haul since 2008, when limited partners committed $511.8 billion to private equity, according to the research. 

Despite anecdotal reports of investors’ declining interest in mega-buyout strategies – which drove fundraising totals prior to the financial crisis – LP commitments to buyout funds grew by almost 50 percent in 2012. Buyout funds raised $130.9 billion last year compared to $88.1 billion in 2011. 

LPs committed significantly less to venture capital/growth equity funds last year – $61.8 billion compared to $79.8 billion in 2011. Despite the 23 percent decline, venture capital/growth equity remained the second most popular strategy in terms of overall commitments, according to the data. 

The data also examined fundraising by geographic focus. Global strategies received the largest commitment total with $118.1 billion, though that figure was likely boosted by the presence of several mega-buyout funds on the market last year. Six of 2012’s 10 largest fund closes – which raised around $49.2 billion collectively – were on global vehicles, according to the research. 

The Private Equity International data includes information about the current fundraising environment – 1,596 funds targeting $819.8 billion are on the market or expected to begin fundraising soon. Approximately 30 percent of those funds – 471 vehicles targeting $248.9 billion – have Asia-Pacific focused strategies.