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Fewer Funds and More Capital: Private Equity Fundraising in Q3 2015

by Kathryn Sharpe

  • 23 Oct 2015
  • PE

Q3 2015 witnessed the fewest private equity fund closures in a quarter since the start of 2006. Preqin’s Funds in Market online service shows that 193 funds held a final close in Q3 2015, a decrease of almost 41% from the second quarter of the year, which saw 329 funds complete fundraising. The number of funds closed in Q3 2015 also represents a reduction of 34% from the 294 funds closed during Q3 2014. However, funds closed in Q3 2015 raised an aggregate $141bn in capital commitments – the most capital raised in a quarter so far this year. Additionally, this surpassed Q3 2014 fundraising by almost $29bn.

Despite Q3 2015 witnessing so few fund closures, the average size of funds closed was $769mn, representing a significant increase from the $437mn average in Q2 2015. Buyout and venture capital funds were the most populous in terms of funds closed in Q3 2015 and together represent 45% of all private equity funds closed in this period. Funds with a buyout strategy accounted for 36 of the 193 funds and raised an aggregate $49bn, while 51 venture capital vehicles accumulated $11bn in commitments.

North America-focused funds accounted for 97 vehicles closed in Q3 2015 and collected more than 59% of all capital raised in the quarter, while 45 Europe-focused funds closed totalling $34bn.  Despite recent economic instability, Asia experienced an improvement in fundraising; 29 funds focusing on Asia closed in Q3 2015, collecting a combined $16bn, an increase from the $10bn raised by 46 funds focused on the region in Q2 2015.

The largest fund to close in Q3 2015 was Blackstone Real Estate Partners VIII on $15.8bn. The fund targets a broad range of real estate and real estate-related global investments with a primary focus on North America. This was followed by Sweden-based buyout fund EQT VII closing on €6.8bn. The buyout fund invests in the Nordic region and German-speaking Europe across a diversified range of industries.

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