2012 Private Equity Fundraising: Differences between Asia and North America (As of November 23 2012)

by Wan Ping Chia

  • 27 Nov 2012
  • PE

With just over a month left of 2012, Preqin's Funds in Market database has tracked the closing of 101 Asia-focused and 172 North America-focused private equity funds so far this year (excluding funds of funds, secondaries and real assets). Funds targeted at Asia-based opportunities have garnered total aggregate capital commitments of $26.8bn. On the other hand, funds primarily focused on North America have attracted more than four times that amount ($104.9bn).

Being the most prevalent fund type in the private equity universe, venture funds unsurprisingly feature as the most popular fund type raised in 2012 in both Asia and North America. Forty-eight percent of Asia-focused vehicles to close so far this year are targeted at venture investments, raising total aggregate capital worth $5.9bn, while an aggregate $18.4bn has been raised in capital commitments to venture funds by 41% of North America-focused vehicles to close so far this year.

Buyout funds are one of the most predominant fund types in North America. 33% of North America-focused funds to close in 2012 so far are buyout vehicles, collecting a significant $42.1bn in aggregate capital commitments. This represents the largest pool of capital among all North America-focused private equity strategies so far this year. However, this fund type does not prove as popular in Asia. Among Asia-focused funds to close in 2012 to date, only 7% have consisted of buyout vehicles. Asia-focused buyout funds have raised $5.3bn so far in 2012, a total of $600mn less than the amount raised by Asia-focused venture funds over the same period.

Distressed debt is also a notable investment strategy for vehicles targeting North America. Distressed debt funds focused on North America that have held a final close in 2012 to date have raised $18.9bn in aggregate capital commitments. This is slightly more than the capital raised by venture funds targeting the region. However, there have been no Asia-focused distressed debt vehicles to close in 2012 so far.

In the Asia-based private equity market, growth funds prove popular. Thirty-six percent of Asia-focused funds to close in 2012 so far are targeted at growth opportunities; these vehicles have attracted aggregate capital commitments worth $9.4bn. This is a stark contrast to the $3.7bn raised by growth funds focused on North America that have closed over the same time period. Growth funds represent only 3% of the total number of North America-focused private equity funds to close in 2012 to date.

The differences between fundraising in North America and Asia with regard to fund type are indicative of the types of deals available in each region. Fund managers seeking private equity opportunities in North America are more inclined to raise buyout funds to invest in a mature marketplace or seek investments in distressed private equity to take advantage of financial instability in the region. Conversely, Asia provides GPs with attractive growth opportunities in its burgeoning market. As the Asian market matures and the region starts to benefit from an influx of growth capital, the next step may be more aligned with the more mature types of investment found in North America.

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