Preqin’s initial Q2 2015 private equity fundraising data reveals the state of the global private equity fundraising market. Despite a substantial amount of capital being accumulated and a number of mega funds successfully completing the fundraising process, the figures show some decline. Two-hundred and twenty private equity funds closed in Q2 2015 collecting $105bn in aggregate capital; this represents a 29% drop in the number of funds and a 35% decrease in terms of capital raised in the quarter from the same period in 2014.
In terms of fund type, venture capital vehicles held the most final closes in Q2 2015 (74), and accounted for 13% ($13.9bn ) of total capital raised. Notably, North America-focused venture capital fundraising in Q2 2015 exceeded buyout fundraising in the region by 38% – a feat only achieved once before in Q1 2012. Overall, however, real estate funds raised the most capital during Q2: 43 funds secured a combined $24.1bn. Two of the 10 largest vehicles closed in the quarter were real estate funds, raised by Lone Star Funds and AXA Real Estate, as seen in the table below.
Seven of the 10 largest funds to hold a final close in Q2 2015 are managed by US-headquartered firms. Lexington Capital Partners VIII ranks top of the list, after securing $10.1bn, $2bn above its initial target. The secondaries vehicle will utilize a wide range of techniques, including portfolio acquisitions, balance sheet spin-outs, equity co-investments, hedge fund private equity purchases and fund recapitalizations to acquire private equity fund interests and other alternative assets on a global scale.
Despite H1 2015 fundraising lagging behind levels seen in H1 2014, market conditions remain buoyant, supported by a further $43.4bn raised in Q2 2015 through 149 funds holding interim closes. The average time taken for funds to reach final close so far in 2015 has also continued to improve since the 18-month spike in 2013. In 2014, private equity funds took an average of 16.7 months to close, but the mean stands at 16.2 months in 2015 YTD.
Looking forward, Preqin’s Funds in Market database shows that there are currently 2,248 funds on the road aiming to raise an aggregate $781bn.