Buyout Fund Sizes

by Louise Maddy

  • 23 Apr 2012
  • PE

This month’s Spotlight featured analysis of Buyout Fundraising Confidence which explored buyout fundraising levels since 2007 and the average size of buyout funds over that period. Fundraising remains challenging given the concerns over the number of viable investment opportunities due to the high levels of dry powder still held by GPs and constriction of exit opportunities.

There are currently 247 buyout vehicles on the road targeting an aggregate $201.6bn. The proportion of buyout funds currently in market increasing their target size on their previous fund in the series is on average decreasing. Seventy nine percent of buyout funds closed between 2011 and 2012 increased their target size, but only 68% of funds currently in market are managing to achieve this. Fund managers able to raise bigger buyout funds than their previous fund in the series have on average raised two or more funds, indicating that investors are drawn to buyout firms with an established fund series and a performance track record. An example of this is the Apax Europe VIII fund, managed by the established fund manager Apax Partners that has a target size of €9bn, €500mn more than Apax Europe VII which completed fundraising in 2008.

Despite the difficult fundraising conditions, the first quarter of 2012 showed an upturn in average fund size of $800mn by 24 buyout vehicles closing on $19.3bn in commitments, suggesting that fund manager and investor confidence is returning. The largest of these funds to close so far in 2012 is the BC European Cap IX which raised €6.5bn, €500mn above its target.

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