Press Releases

Private real estate fundraising fell 23% between Q3 and Q4 2011. Just $9.4bn was raised by the 23 funds that reached a final close in the last few months of the year.

Private equity fundraising floundered in the second half of 2011 and the funds that closed in the fourth quarter only raised a similar amount to those that closed in the third quarter.

Q4 2011 exit activity to date is below the level achieved in Q3 2011, suggesting that private equity-backed exit flow is back in recession following a fleeting, record-breaking renaissance in the first half of the year. According to Preqin data, 170 exits have been completed so far this quarter with a total value of $28.4bn, the lowest quarterly total since Q1 2010.

Growth funds investing during the crisis period have produced median returns of over 7%, data from the recently launched Preqin Growth Benchmarks reveals.

Twenty-three percent of investors believe private equity has become more attractive in light of recent volatility in financial markets. A further 64% of investors do not view private equity any differently as a result of the current financial climate and 14% find it less attractive, Preqin research has found.

Hedge fund managers will be able to access new capital sources over the next 12 months as 80% of investors are at least considering investing with new managers, the latest Preqin research reveals. Only 20% of hedge fund investors plan to focus solely on maintaining existing relationships with managers over the next 12 months.

There has been a notable increase in the mean and median percentage transaction fees across all private equity deal sizes since the recovery began, a joint investigation by Preqin and Dechert LLP has revealed.

GPs that closed their funds in 2008 still have a combined $204 billion in dry powder to invest from these vehicles, the latest Preqin research reveals. As the average private equity fund investment period is five years (real estate funds are the exception), these GPs will be under a considerable amount of pressure to invest both to avoid exercising clauses to extend the agreed investment period and to provide timely returns on capital.

17 private equity real estate funds reached a final close in Q3 2011, raising an aggregate $11.0bn. This is a 16% decline on the $13.1bn which was raised by 27 funds in Q2 2011; however, Preqin anticipates the latest quarterly figures improving slightly (10-20%) as more information becomes available, which suggests fundraising in Q3 could end up close to the level seen in the previous quarter.

During Q3 2011, 97 private equity funds reached a final close, raising an aggregate $44.8bn, significantly less than the $82.8bn that was raised by 175 funds that closed in Q2 2011. In addition to the 97 funds that reached a final close in the quarter, however, a further 109 funds held interim closes, securing commitments totaling $42.7bn towards their fundraising targets.

Increased investor caution has led to a decline in the proportion of investors that are prepared to invest with managers raising their first real estate fund, the latest Preqin study shows. 26% of investors would commit to first-time funds, while 15% will consider doing so; this is a decline of eight and one percentage points respectively since 2010.

Private equity buyout deal flow has increased over the past year, but it is very much a seller’s market, Preqin and LexisNexis Enterprise Solutions have found. A joint study of global private equity buyout firms has revealed that while 49% feel that the number of opportunities has increased over the past 12 months, 68% feel that these opportunities are overpriced.

75% of investors are looking for greater liquidity in their hedge fund investments following the financial crisis, the latest Preqin study reveals. Funds with lock-up periods are now considered less favourable amongst investors as they seek the flexibility to exit their investments at their own discretion.

Research conducted for The 2011 Preqin Infrastructure Review has revealed that just under two-thirds of infrastructure funds charge management fees of 2% on funds that are currently raising or that have closed in the recent past. This is despite pressure for lower fees from investors: 62% believe that management fees are too high.

Private equity fund fees remain a bone of contention for half of investors, although they are willing to pay for managers with a strong performance history.

The latest Preqin hedge fund investor study has revealed that just under one-third of investors plan to make a commitment to the asset class in the coming 12 months, investing up to a combined $195bn.

18 funds reached a final close in Q2 2011, raising an aggregate $11.2 billion. This is an increase on the $8.9 billion which was raised in Q1 2011 and the $7.1 billion raised in Q4 2010. Fundraising does remain challenging, and is still well below the levels seen in 2006-2007.

Investment consultants have ranked opportunistic funds as the most attractive of all real estate strategies in the current market, the latest Preqin study reveals.

An increasing proportion of private equity cash is being assigned to Asia by the 10 largest global PE firms. 23% of deals completed by the firms in 2011 to date have involved assets in the region, compared to 5% in 2007.

Only 7% of institutional investors in hedge funds have no plans to increase their allocations to hedge funds over the next couple of years, the latest Preqin study shows.

Preqin's latest research shows that only 40% of $1bn+ funds are producing returns exceeding the median compared to 54% of those which raised $500mn or less.

A project undertaken by Preqin in association with AVCAL reveals that Australian investors are still interested in private equity and venture capital investments, but are taking a cautious approach to investment.

Preqin’s quarterly deal flow data shows Q1 2011 exit activity matched record levels set in Q4 2010, while the number and value of new deals fell; 623 PE-backed deals worth $49.9bn were announced, a decrease of 8% in number and 26% in aggregate value from Q4 2010.

Q1 2011 was another disappointing quarter for private equity fundraising, although a number of significant first closes during the period do point to likely increases in final close volume as 2011 progresses.

AB-1743 introduces new regulations for fund marketing professionals seeking to interact with certain California public pension plans including CalPERS and CalSTRS.

In order to measure the effect of the regulations, Preqin undertook a survey of placement agents, their views on the various demands, and whether they would continue to market funds to affected pension plans.

Following extensive research, the 2011 Preqin Sovereign Wealth Fund Review is now complete. This year's publication shows that total assets are now standing at $4tn, with allocations to alternatives rising across the board.

Preqin research reveals a boom in the unlisted infrastructure market in India.

In the latest Preqin study, hedge fund managers revealed that they are altering their fees, risk adjustment procedures and strategic
offerings to attract institutional investors to their hedge funds.

Aggregate $35.8 billion raised in 2010, a 28% decline on private equity real estate fundraising in 2009.

265 exits worth $71.8bn occurred in Q4 2010; 593 new private equity deals worth $64.2bn announced. 2,171 buyout deals worth $204.9bn announced in all 2010 – over double total value of 2009 deals.

Interviews conducted by Preqin with over 100 leading investors in private equity funds reveal that demands on private equity portfolios are now higher than ever before relative to public markets.

The latest Preqin survey shows that the number of hedge fund investors expressing an interest in seed investments has almost doubled, from 11% in 2009 to 21% in 2010.

The latest Preqin private equity compensation study, based on a survey of 180 leading private equity firms worldwide, reveals that changes in bonus payouts to employees at private equity firms have been mixed. While base salaries have remained relatively stable, with three-quarters of firms reporting no change or relatively small increases, bonus payouts are where the real divergence has occurred.

Preqin survey of Europe-based insurance companies shows the EU legislation will have a significant impact on both direct and indirect real estate investment.

81 private equity funds worldwide reached a final close in Q3 2010 raising an aggregate $57bn, a small increase from the $49bn raised in Q2 2010.

A total of $6.7bn was raised worldwide by six funds achieving a final close – the highest level of aggregate capital collected since 2008. This marks the fourth consecutive quarter registering an increase in fundraising from the previous quarter.

Private equity real estate funds raised $9.8 billion worldwide in the first quarter of 2010, the third successive quarter in which less than $10 billion was raised. While Q1 fundraising did represent a small increase on the $9.4 billion which was raised in Q4 2009, the pace of fundraising remains far slower than it has been in previous years.

Preqin’s latest report reveals that the aggregate total assets of all sovereign wealth funds (SWFs) has continued to increase over the past year. The recovery in global equities markets helped certain SWFs regain ground lost as a result of the economic downturn.

2009 saw only $42bn raised by 103 funds worldwide, making it the worst year for new private equity real estate funds since 2004,
when $37bn was raised by 136 funds worldwide. 2009 figures represent a 69% decline compared with 2008, when $133bn was
raised by 225 funds worldwide.

First drop in annual deal volume since emergence of unlisted infrastructure asset class as unlisted infrastructure fund managers across the globe completed 130 deals in 2009, the lowest annual total since 2005.

The effects of the changing credit market and global economic downturn on different areas of the buyout industry can now be seen through examining the performance of different sized vehicles since the onset of the financial crisis in the third quarter of 2008.

Performance data for the private equity industry as of 31st March 2009 is now in. The results are showing that although private
equity valuations are still in decline, the rate of quarterly change has slowed considerably from 2008, suggesting that the market is
bottoming out and that the fund valuations are set to stabilize.

Private equity real estate funds worldwide raised just $4.9 billion in Q3 2009, the lowest fundraising total for a quarter since Q3
2003, when 17 funds raised $3.2 billion.

Results of Preqin’s Hedge Fees Survey - “2 & 20” Fee Structure being driven Down by Institutional Pressure.

Preqin has interviewed a total of 568 institutional investors in private equity as to their interest in the secondary market, and their expected timeframe for activity in the market.

In 2007 a total of $34.9bn was raised, up from $6.6bn raised in 2005, and 2008 looks set to be another strong year with $13.2bn raised already in the year to date.

Preqin’s latest figures indicate the full toll that the global economic downturn has taken on private equity returns. Overall returns for
the industry are down by -27.6% for one year performance compared to this point one year ago.