Placement Agent Use of Funds in Market - Part 2

by Nicholas Jelfs

  • 01 Aug 2011
  • PE

Following on from last month’s blog on placement agent use by funds currently raising, Preqin’s Funds in Market product provides greater analysis into the use of placement agents in helping raise capital commitments for private equity funds. Over the last few years, placement agent use has fluctuated slightly; 47% of funds that were in market as of July 2008 used placement agents. This number rose to 50% as of July 2009, and then dropped to 44% in July 2010. As for funds currently in market, the proportion that are using the assistance of placement agents stands at 46%

42% of North American fund managers with a fund in market are using placement agent services. 48% of European GPs and 47% of Asia and Rest of World fund managers are actively using such services. Infrastructure funds have engaged placement agents most, with 69% of funds enlisting their assistance during their fundraising effort. 65% of both buyout and distressed private equity vehicles are using placement agents, as are 50% of mezzanine funds.

Preqin’s extensive research reveals that 43% of fund managers that are in market with a first time fund have enlisted the help of placement agents. This figure rises to 48% of fund managers raising a 2nd to 9th fund, and then dropping off to only 39% of experienced GPs that have raised more than 10 funds. Of the funds that have closed in the last three months, 62% used a placement agent and completed fundraising in an average of 17 months, raising a collective USD 19 billion. The remaining 38% of funds that did not use a placement agent took on average 19 months to complete the fundraising process, raising slightly over USD 10 billion in total.

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