The difficult fundraising conditions endured by fund managers in 2010 is highlighted by the fact that 50% of the 538 private equity funds that reached a final close last year did so below target. The 2010 figure is significantly higher than that of 2006, one of the industry’s strongest fundraising years, when 25% of 1189 funds failed to reach their target.
Although fundraising conditions remain challenging, and a greater proportion of funds are failing to meet their capital target compared to previous years, 38% of funds still exceeded their original fundraising target in 2010. This suggests that there is still demand from investors for a compelling fund proposition from fund managers. At present, 681 of the 1649 funds in market seeking $642bn in aggregate commitments have already achieved a final close.
Atlas Capital Resources is one of a number of funds that closed above target. The debut traditional turnaround/distressed debt fund from Greenwich-based Atlas Holdings closed on $365mn, $115mn above its original fundraising target. Brookfield Asset Management raised the Brookfield Americas Infrastructure Fund to invest in large-scale infrastructure transactions specifically in the energy, utilities and transportation sectors. The fund had an initial target of $1.5bn but had gathered a total of $2.7bn when the fund reached its fi nal close in September 2010. Similarly, Kleiner Perkins Caufield & Byers raised $200mn, twice the initial target, for the iFund, a fund raised in conjunction with Apple supporting Apple application developers and related digital media companies.