Preqin’s Fundraising Momentum tool on the Funds in Market online service tracks the time spent in market for both funds raising and closed funds on the Preqin database. As of July 2015, there are 2,287 private equity funds in market. Of these, 38% are in their first year of fundraising; 36% are in their second year and 25% have been fundraising for over two years. For funds currently in market that have held at least a first close, it has taken on average seven months to reach this initial close, with these vehicles securing an average of 39% of targeted capital.
As seen in the table above, funds that have held a final close this year spent an average of 17 months on the road, matching the average time spent fundraising by vehicles closed in 2014. This demonstrates that LP caution exhibited in 2014 has continued and time spent fundraising is some way from the pre-financial crisis 11-month average witnessed in 2006. Funds closed so far in 2015 have taken an average of seven months to reach a first close, securing interim commitments averaging 48% of targeted capital. In the pre-crisis years of 2006 and 2007, funds took the shortest amount of time to reach a first close at just five months, amassed more than 50% of targeted capital on average at this point. Nonetheless, funds closed so far in 2015 have achieved an average of 107% of their target size at final close, the largest proportion of targeted capital collected since 2007.
Analyzing fundraising momentum by region highlights interesting trends in North America and Europe. Funds focused on investment opportunities in North America have taken an average of 16 months to reach a final close so far this year. On average, these vehicles have raised 108% of targeted capital at final close – the highest level witnessed since the 116% seen in 2006. In comparison, funds focused on European opportunities that have held a final close so far in 2015 have spent more time in market at an average of 18 months. However, these funds have secured a record average 114% of targeted capital raised at final close. Despite time spent in market in 2015 falling behind that of other regions, Europe has shown promise in regard to the average proportion of targeted capital raised at both first and final close.