Impacted by economic and political factors, private equity fundraising trends in 2014 varied across geographic regions, as shown through Preqin’s Funds in Market online service. As in previous years, North America-focused funds continued to lead overall fundraising, despite a decrease in total annual capital accumulated by the region. Despite growing concerns surrounding the stability of the Eurozone in H2 2014, Europe as a whole experienced its highest fundraising levels since 2008. Asia-focused fundraising remained at similar levels to the previous year, while fundraising focused outside the aforementioned regions continued to struggle.
As seen in the chart above, North America was the strongest region for fundraising during 2014, with 562 funds accumulating a total of $302bn. This represents 58% of funds raised worldwide. Venture capital funds were the most prominent strategy in terms of the number of funds raised in North America, with 160 funds raising an aggregate $29bn during 2014. In terms of capital raised, buyout is the leading strategy, with 99 buyout funds amassing $112bn. New regulations, such as SEC solicitation, have now been in place for over a year; although their impact on the market is not yet fully known, 2014 figures suggest that North America-focused fundraising will remain in a leading position in 2015.
European fundraising faced challenges during 2014 as a result of weak economic growth, political uncertainty and increasing fears over deflation. Despite a smaller number of funds being closed, more capital was secured: 251 funds raised $135bn. As with North America, buyout as a strategy raised the most capital, with 46 funds accumulating $41bn. This was closely followed by real estate funds, which raised $38bn in commitments, and secondaries ($14bn).
Asia-focused funds struggled to attract capital during 2014 as the attention of fund managers remained focused on the more established markets of North America and Europe. In total, 156 Asia-focused funds raised $64bn over the course of the year. Venture capital funds were the most numerous in Asia, with 48 vehicles closed in 2014; however, buyout and growth vehicles secured more capital, raising $22bn and $12bn respectively. Rest of World fundraising declined during 2014, which could be due to LPs’ increased caution regarding investment in emerging markets in the current economic climate. Eighty-three Rest of World-focused funds closed in 2014, accumulating $21bn.
As seen in previous years, it is likely that North America will continue to lead global fundraising efforts in 2015, while allocations to Europe-focused funds will be largely determined by the region’s financial market. It remains to be seen if LPs will begin to give more consideration to emerging markets.