Early predictions for 2018 suggested that the rapid pace of fundraising which characterized 2017 would not be sustainable. However, the first three quarters of 2018 saw more money raised than in any year other than 2017. Although significantly fewer funds closed in 2018 compared to the previous year, $757bn in total capital was secured – on par with 2016, as illustrated in the chart below. Preqin expects this to rise by up to 10% as more information becomes available, meaning that 2018 could yet mark the second highest fundraising year of all time.
What is more striking is the influence that the largest firms and funds are having on the market. Funds seeking to become the largest private equity, venture capital, real estate, infrastructure and secondaries vehicles are all currently in market – in all, 17 funds are each currently seeking $10bn or more from investors. This seems likely to increase the divide between the top and bottom ends of the market; at a time when investors are concerned about the prospect of a market correction, many will seek to invest with firms they have invested with before.
It seems that managers have reason to anticipate such strong appetite from investors: despite concerns about a potential market correction, large proportions of investors in every private capital asset class said they would commit more capital in 2019 than they did in 2018. Interim fundraising bears this out – of the 5,000 funds in market, around 3,000 have already held an interim close and have secured more than half a trillion dollars. It seems that investors are still committing significant sums to private capital and so we can expect the robust pace of fundraising to continue well into 2019.
The 2019 Preqin Global Alternatives Reports are due for release in late January, which contain 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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