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Placement Agent Use by Private Equity Funds in Market – November 2013

by Kamarl Simpson

  • 19 Nov 2013
  • PE

The time taken to raise a private equity fund has increased to an average of 18 months over the last two years. This highlights the fact raising institutional investor capital can be a time consuming process, eating up valuable time that GPs could be dedicating their core competency of portfolio management. As a result, many GPs utilize the services placement agents provide from preparing marketing materials to actively seeking investor commitments.

The private equity fundraising market is at an all-time high with a record number of private equity funds in market. These 2,059 funds on the road are seeking an aggregate $756bn in capital commitments. Of the funds currently in market, 44% have appointed the services of placement agents to assist with fundraising. As of November 2013, 49% of vehicles that completed fundraising so far this year enlisted placement agent services.

Of the private equity vehicles in market that predominantly focus on investments across North America, 44% have employed a placement agent to help raise capital commitments. For Europe-focused funds, 51% are using a placement agent and for Asia and Rest of World-focused vehicles a total of 38% of funds have enlisted their services. By fund type, buyout funds and distressed private equity funds have the highest proportions of placement agent use with 63% and 62% respectively.

Park Hill Group is helping to raise capital for the most funds currently on the fundraising trail, with a total of 17 funds having enlisted their services, representing a collective target of an aggregate $23.3bn. This is followed by Credit Suisse Private Fund Group, which is helping to raise 12 funds, and UBS Investment Bank Private Funds Group, which is assisting 11 funds. Credit Suisse Private Fund Group is aiming to raise a total of $21.6bn and UBS Investment Bank Private Funds Group is targeting a total of just over $13bn.

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