Overview of the private equity fund of funds fundraising market.

by Joe Childs

  • 21 Jan 2011
  • PE

Preqin’s Funds in Market database shows that there are currently 152 funds of funds on the road seeking aggregate capital commitments of $48.5 billion. 38% of these private equity vehicles are known to have commenced investing, having held interim closes totalling $8.3 billion. 59% of funds of funds that have held at least one interim close are managed by North American firms, 34% are managed by Europe-based firms and 7% are managed by firms based in Asia and Rest of World.

The fundraising market for private equity funds of funds has struggled in the last couple of years, with year-on-year decreases in the number and size of vehicles closing. The average target size of private equity funds of funds currently in market is approximately $385 million, which is 60% higher than the average size ($240 million) of funds of funds successfully holding a final close in 2010. With an average target of $451 million, North American managers are seeking to raise considerably larger vehicles than their European counterparts, which are aiming to secure $243 million on average. The significant difference may partially be explained by the fact that a number of large US players commenced fundraising efforts over two years ago in a more buoyant private equity market.

The average size of funds of funds that are currently being raised by private equity firms located in regions other than North America and Europe stands at $423 million. This is partly influenced by the expanding private equity market in Asia. China, in particular, is home to several vehicles that are aiming to raise significant sums, while Australia, Singapore, Mexico and United Arab Emirates also host fund of funds managers that are working to secure considerable volumes of capital.

For further information about the private equity funds that are currently seeking capital, and those that have closed in the past, please see how Funds in Market can help you.

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