Private equity fundraising fell to its lowest half-year total since 2015 in the first six months of this year.
According to PEI data, 274 funds held final closes for a total of $177.2 billion, a 7 percent decline from the $191.3 billion raised in H1 2018. Average fund size fell by 8 percent over the same period.
The top 10 final closes made up a large percentage of overall fundraising. Ten funds combined to raise just under $80 billion, for a 43 percent share of total capital raised.
Advent International led the way, raising $17.5 billion for its GPE IX fund. Other top raises included Cinven’s €10 billion for the Seventh Cinven Fund, EQT’s €9 billion for EQT Infrastructure Fund IV, TA Associates’ $8.5 billion for TA XIII and Genstar Capital’s $7 billion for Genstar Capital Partners IX.
Several normally bullish limited partners have been quiet so far this year. The California Public Employees’ Retirement System invested in just two of the top 10 funds, pledging $250 million to Summit Partners’ Growth Equity Fund X and $100 million to Siris Capital Group’s Siris Partners IV.
The Washington State Investment Board allocated $1.45 billion to three top 10 funds, $750 million to Advent’s GPE IX, $400 million to TA XIII and $300 million to Warburg Pincus’ China-Southeast Asia II fund. The $134.7 billion pension plan was the highest-committing LP for the period.
WSIB’s $750 million commitment to Advent helped the Boston-based GP to close the year’s largest fund so far. The $72.2 billion Massachusetts Pension Reserves Investment Management Board and the $50.7 billion Tennessee Consolidated Retirement System allocated $300 million and $200 million respectively to GPE IX.
New York State Common Retirement Fund finishes just behind WSIB with $1.11 billion in total commitments, spread amongst the Seventh Cinven Fund ($364 million), EQT Infrastructure Fund IV ($268 million), TA XII ($280 million) and Siris Partners IV ($200 million). The system approved $751.7 million worth of commitments in July.
The Seventh Cinven Fund reached its target size of €10 billion and became the second-largest fund closing during the period due to commitments from LPs such as Teacher Retirement System of Texas (€225 million), Oregon Public Employees’ Retirement System (€200 million), Tennessee Consolidated Retirement System (€150 million) and South Dakota Investment Council ($90 million).
Amongst the funds closed so far, TA Associates’ TA XIII has also received commitments from major state pension plans. As well as the allocations from WSIB and NYSCRF, Massachusetts Pension Reserves Investment Management Board ($250 million), Tennessee ($200 million) and the $80.4 billion Virginia Retirement System ($325 million) provided capital for the multi-regional fund.
Asia-Pacific funds received strong backing, with TPG Asia VII raising $4.6 billion and China-Southeast Asia II raising $4.25 billion. The Seventh Cinven Fund was the only Europe-headquartered fund in the top 10.
One outlier among the US pension funds below is Taiwan-based Fubon Life Insurance, which allocated $70 million to Advent’s GPE IX, $256 million to EQT Infrastructure Fund IV, and $30 million to Warburg Pincus’s China-Southeast Asia II.
– Adam Le contributed to this report.