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Private Equity Fundraising

by Ben Formela Osborne

  • 21 Sep 2009
  • PE

As of September 2009 there were 1,597 private equity funds in the market targeting capital commitments of $788.8 billion. In terms of aggregate capital sought this is an 11% decrease from the amount that was targeted by 1,624 funds on the road in January 2009. While this is the first recorded decrease of funds on the road by Preqin, the current levels remain well above those seen in January 2008, when 1,304 funds sought $705 billion in commitments.

In terms of regional prominence, US focused private equity funds on the road were seeking the most capital commitments in September 2009, targeting $436 billion. This was followed by European focused funds and Asia and Rest of World focused funds, targeting $181 billion, and $172 billion respectively. Intriguingly, while all three macro-regions have seen the amount of capital sought shrink since January 2009, it is European focused funds that have withered the most, reining in aggregate fundraising ambitions by some 25%. Asia and Rest of World focused funds have decreased target capital by 8%, and US focused funds by 6%.

Private equity venture funds remain the most numerous of all fund types on the road, with 451 such funds currently looking to secure $83.9 billion from investors. As with the broader trend across all private equity fund types, this is a 14% decrease in aggregate capital sought by venture funds on the road at the beginning of the year. Private equity real estate funds on the road have actually increased in number since January 2009, but these funds are chasing less aggregate capital with 407 real estate funds seeking $205 billion, compared with the $228 billion being sought by 381 funds nine months ago. As of September 2009, 244 buyout funds were hunting $194 billion in aggregate capital, down 28% from the $271 billion sought by 268 buyout funds at the turn of the year.

With the global downturn clearly affecting the private equity fundraising market, it is worth noting that 44% of private equity funds currently on the road have already achieved one or more interim closes. This indicates that despite the challenging fundraising environment, considerable numbers of private equity funds in market are persisting in their pursuit of a final close.

For more information on private equity fundraising, please see Preqin’s Funds in Market product.

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