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Alternatives in 2019: Capital Concentration Prevails in Private Equity Fundraising

by William Clarke

  • 11 Jan 2019
  • PE

In 2018, the private equity fundraising market climbed down from the heights seen in 2017, but capital concentration at the top end of the market intensified. A total of 1,175 funds closed through the year, down from 1,670 that closed in 2017, and vehicles in 2018 raised $426bn compared to $566bn the previous year, as shown in the chart below. Preqin expects these figures to rise by up to 10% as more information becomes available, but fundraising seems unlikely to approach 2017’s totals.

Key private equity fundraising stats:

  • 2018 saw 1,175 private equity funds raise a total of $426bn. This is down from 1,639 funds that raised $552bn in 2017.
  • Funds focused on North America raised $240bn, while Europe- and Asia-focused funds secured $90bn and $80bn respectively. Asia saw more funds closed than Europe for the first time: 250 compared to 196.
  • The average fund size reached $363mn, surpassing 2017 ($339mn), and is the highest level since 2007 ($422mn).
  • The largest fund closed in the year was the $18.5bn Carlyle Partners VII. The 10 largest funds raised $125bn between them.
  • Dry powder continued to climb through 2018, reaching $1.20tn as at December 2018 – a new record.
  • At the start of 2019, there are 3,750 private equity funds in market, seeking a total of $977bn. The five largest funds in market are seeking a combined $219bn.

 Preqin’s Christopher Elvin, Head of Private Equity, commented: “Private equity fundraising is increasingly a two-tier market. Billion-dollar funds accounted for two-thirds of all capital in 2018, and most of the largest fund managers say that they are routinely oversubscribed. Although investor appetite for smaller funds exists, with concerns regarding a market correction, the bifurcation between smaller managers and larger managers is likely to become more pronounced in the months to come.”

The 2019 Preqin Private Equity & Venture Capital Report is due for release in late January, which contains more detailed fundraising data, as well as comprehensive data on fund managers, deals and exits, investors, performance and much more. In the meantime, please take a look at our 2018 Fundraising Update  or browse Insights for more of our recent research.

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