Study: PE fundraising on course for best year post-crisis

GPs are likely to raise more capital than last year’s $420bn, according to PEI’s R&A division

Encouraging news for GPs currently trying to collect capital: private equity fundraising levels remain strong, according to fresh research.

In the first six months of 2014, commitments to closed funds totalled $190 billion, according to PEI’s Research & Analytics division.

This suggests that GPs are likely to match, if not exceed, fundraising levels from last year, when funds globally amassed approximately $420 billion — the highest figure since the financial crisis.

“At the midway point of 2014, we are witnessing a private equity fundraising world in good health, in most parts of the world. We are particularly seeing Asia-focused private equity picking up again, and investors keen on opportunities in Africa,” said Dan Gunner, director of Research and Analytics at Private Equity International.

Historically, more funds close in the second half of any given year. And with some still to announce H1 closings, “it looks highly likely” 2014 will be the strongest fundraising year for the asset class since 2008, the study suggested.

“Another significant trend has been towards investors seeking greater control over their investments, and so a higher proportion of money going to co-investment opportunities. With the second half of any year often stronger than the first, and with more funds set to reveal they’ve closed already in 2014, we can confidently predict that 2014 will outstrip any year post-crisis in terms of capital raising,” Giunner added.

Successful fundraising was largely driven by North-American focused funds, which collectively raised $78 billion. GPs offering global strategies amassed $61.8 billion, while $25.2 billion was collected for Asia-Pacific funds. In Europe, fund managers targeting Western Europe raised $14.8 billion, while $7.3 billion was raised for pan-European strategies and $0.6 billion was committed to GPs investing in Central and Eastern Europe.

Traditional buyout funds remained most popular, collecting $94 billion. However, venture capital has enjoyed a strong start of the year with managers raising $40 billion for the strategy globally. GPs raising mezzanine and debt raised a combined $22.7 billion, while $15.6 billion was raised for secondaries.

Among the largest funds raised so far this year was Ardian’s latest secondary fund, which closed on $9 billion, Bain Capital’s Fund XI, which closed on $7.3 billion and Permira’s fifth vehicle, which held a final close on $7.2 billion.