Side Letter: PE’s record year; Bulls in China; Petershill’s purchases

Side Letter shares a sneak preview of Private Equity International's upcoming full-year fundraising report. Plus: How China's Eastern Bell defied regulatory headwinds to raise $2 billion and a look at Petershill's latest GP purchases. Here's today's brief, for our valued subscribers only.

They said it

“They think: ‘We wouldn’t even be allowed to have performance fees in this market, let’s focus somewhere else’”

Joanna Asfour, global head of consultant relations at Partners Group, tells Bloomberg that the treatment of fees hinders more private market funds from entering the UK’s defined contribution market.

Just happened

Fundraising frenzy
Last year’s private equity fundraising frenzy was indeed a post-crisis record, according to Private Equity International‘s full-year 2021 fundraising report, which is due to be published later today. Here’s a preview of what’s to come:

  • Firms raised $733 billion last year, $14 billion more than the previous record set in 2019
  • Buyout funds accounted for 45 percent of capital raised, but only 19 percent of funds closed
  • Venture capital funds accounted for 47 percent of funds closed
  • Asia-Pacific funds raised more capital than their European counterparts
  • MENA, Sub-Saharan Africa and Latin America raised less than $7 billion between them

Bulls in a China shop
Raising capital for Chinese PE funds may well be a struggle at present, but it’s not entirely off the cards. Case in point: Shanghai growth equity firm Eastern Bell last month collected $2 billion across two funds, $800 million of which was for its sophomore USD-denominated vehicle. PEI recently caught up with partner Daniel Sun to discuss how the process was impacted by the country’s ongoing regulatory crackdown. Though the full interview is well worth a read, here are some key takeaways:

  • Many overseas LPs put China commitments on pause last summer, though some have since restarted after realising the uncertainty was not a short-term phenomenon
  • Some investors have slashed the amount of capital earmarked for China and the number of GPs they’re willing to spread it over
  • A more hostile environment for US listings is expected to have an impact on exits until the market becomes more welcoming or Hong Kong develops into an adequate alternative

Esentials

Petershill’s purchases
Newly listed GP stakes vehicle Petershill Partners has issued an acquisition update for Q4 2021. Here’s what you need to know:

Marquardt’s move
PE veteran Stephen Marquardt has been named as chief executive of Blue Earth Capital, an impact investment firm established and backed by Partners Group’s founders, affiliate title New Private Markets reports (registration or subscription required). Marquardt, who will take up the role in March, was previously co-head of investor relations at secondaries firm Coller Capital from 2016 to 2021, and, prior to that, chief executive of Doughty Hanson. He has also served on the board of impact firm Bridges Fund Management. Blue Earth announced the first close of its Climate Growth Fund at $100 million last week, with $50 million from Partners Group co-founder Urs Wietlisbach’s charitable foundation and $50 million from Union Bancaire Privée.


Today’s letter was prepared by Alex Lynn and Carmela Mendoza