Seventy-five private equity funds of funds held a final close in 2014, raising an aggregate $14.3bn in investor capital. These vehicles were raised by 58 worldwide fund of funds managers, the majority of which are headquartered in the US (60%), with other countries of residence including Switzerland (8%), the UK (7%), China, Norway and Germany (all 4%). These funds of funds target a range of fund types, industries and geographies; 55% of the 75 vehicles have a primary focus on investments in the US, 23% in Europe and 11% in Asia. The remainder seek to invest in private equity vehicles focused on other economic regions, including the MENA region.
As seen in the above chart, Adams Street Partners raised the largest amount of capital over 2014. The US-based firm closed its 2014 funds of funds series in October 2014, having secured $1.9bn in investor capital commitments. These vehicles, Adams Street 2014 Global Fund, Adams Street 2014 US Fund, Adams Street 2014 Non-US Developed Markets Fund and Adams Street 2014 Emerging Markets Fund, give the fund manager the capacity to make global investments in a wide range of fund types and industries.
ATP Private Equity Partners V was the largest private equity fund of funds vehicle to hold a final close in 2014. The fund secured capital commitments amounting to €800m (approximately $1.1bn), and looks to make investments in buyout, venture capital, distressed debt and secondaries vehicles focused primarily on the US and Europe, with the capacity to also gain exposure to emerging markets. The fund, managed by ATP Private Equity Partners, can also make secondary market and direct/co-investments.
In April 2014, France-based Ardian raised a fund of funds vehicle in addition to a $9bn dedicated secondaries vehicle. Ardian Secondary Fund VI SICAR raised $1bn in total, and invests in buyout and venture capital funds focusing on global opportunities, including the US, Europe and Asia.
Preqin’s Funds in Market online service currently tracks 153 private equity funds of funds in market seeking nearly $34.5bn in investor commitments. This signifies that although there has been a decreasing amount of capital raised by this fund type over the past couple of years, these vehicles still contribute a significant amount of capital to the private equity asset class.