Year-end rush boosts fundraising high

GPs from across the globe garnered $365 billion in commitments during 2013, boosted by almost $10 billion in last minute commitments in late December, according to Private Equity International’s Research & Analytics division.

Fundraising was already on track to beat 2012 in October, with $269 billion raised during the first three quarters of the year, PEI reported earlier.

However, a further $88 billion was collected by 135 funds during the final quarter of the year.

The total amount raised was a 21.6 percent increase year-on-year, with GPs raising just over $300 million during 2012, and the largest amount of capital that has been raised by private equity since the 2008 global financial crisis, according to Research & Analytics data.

The increase was in part driven by an uptick of interest in North America, with 38 percent more funds raised for the region in 2013 year-on-year. North America-focused GPs raised a total of $124.5 billion compared to just $89 billion in 2012.

However, capital raised by funds targeting Asia-Pacific continued to decline, having peaked in 2011. In 2013, Asian GPs raised $27.6 billion, a 55 percent drop from the $62 billion raised in 2011.

The decline comes as emerging market GPs fall out of favour with investors as a result of slowing growth rates and funds struggling to make realisations in some key markets, notably China and India.

Buyout funds and corporate private equity continued to represent the largest pool of capital raised, followed by venture capital and growth equity combined. About $174 billion was raised by buyout funds, compared to the $132.7 billion raised year-on-year.

The amount raised by mezzanine and debt funds grew by 48 percent, to $66.1 billion from $44.4 billion during 2012, while other fund strategies raised roughly the same as last year, according to PEI’s Research & Analytics divison.

The biggest fundraise this year was by CVC Capital Partners, collecting $14.2 billion for its European Equity Partners VI fund. This was followed by The Carlyle Group’s $13 billion North America vehicle – its sixth in market, and Warburg Pincus’ $11.2 billion global vehicle, the eleventh global product for the firm.

“2013 has been characterised by the continued returning confidence in private equity as an asset class. That said, the much-told story of a split between those that raise big funds quickly and those that struggle remains true. Where the likes of CVC, Carlyle and Apax have had real success, others are finding things much harder,” Dan Gunner, director of Research and Analytics at PEI, said in a statement.

“It’s also been interesting to see a strong shift towards debt and mezzanine opportunities as funds continue to diversify in their investment approach.”