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Private Equity Fund of Funds Fundraising Outlook

by Patrick Adefuye

  • 05 Jan 2012
  • PE

During 2011, a total of 66 private equity funds of funds finalized their fundraising periods, raising an aggregate $14bn. This was the fourth successive year of decline in fundraising for these vehicles in number and value terms, dropping from the peak of 177 vehicles that closed in 2007 for a total of $61.4bn.  In 2010, 71 funds of funds held a final close raising $15.2bn in aggregate.  

Currently, there are 153 private equity funds of funds seeking capital, which is slightly higher than the 144 multi-manager vehicles in the market at the start of last year. The aggregate amount of capital being sought by funds of funds currently on the road is $39.7bn; lower than the $54bn that was being sought at the start of 2011.

Of the 153 private equity funds of funds in the market, 72 focus mainly on the US and are seeking $20bn from investors, while 39 vehicles have a main focus on Europe, seeking $9bn in total. There are 42 Rest of the World focused fund of funds in the market currently – seeking a total of $10.7bn – of which 33 will focus on Asia, five on the Americas, one on Australasia, with three adopting a multi-regional diversified strategy.

HarbourVest International VI Partnership is the largest private equity funds of funds vehicle seeking capital currently, with a target of $3bn. The vehicle pursues a diversified strategy, offering its investors access to funds in Europe, US, Asia and the Rest of the World and to various fund types.  

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