Private Equity Funds Closed in 2013 that Exceeded their Target Sizes – January 2014

by Kamarl Simpson

  • 20 Jan 2014
  • PE

In terms of aggregate capital raised, 2013 was the strongest year for fundraising since 2008, with 918 private equity funds holding a final close securing an aggregate $466bn. Analysis into fundraising statistics reveals some interesting trends in the funds that meet, exceed or fall below their initial target size. For instance, just under half (48%) of the private equity funds that held a final close in 2013 exceeded their target size, with a further 18% matching their target. This represents the highest proportion of funds to close above target since 2007, in which 53% of funds exceeded their target. 

The largest amount of aggregate capital was raised by buyout vehicles, garnering an aggregate $174bn, with an impressive 63% of these funds surpassing their targets. The most successful fund type was venture capital, with 41% of the 209 vehicles closed in 2013 exceeding their targets, having collectively raised $16bn. Real estate funds were the second largest fund type by number of funds and total capital raised, with 48% of such funds exceeding their target. 

Unsurprisingly, Preqin’s data shows that in 2013, there was a strong negative correlation between the time spent on the road by a fund and the ability for the fund to meet its target size. Of the private equity funds that spent one to six months in market, the majority (68%) of funds closed exceeded their target size, and an additional 13% matched their target. Conversely, 75% of the funds that closed in 2013 after spending more than 36 months on the road held a final close below target. 

A significant 36% of funds that closed in 2013 raised by first-time fund managers managed to exceed their target, compared with 51% of experienced fund managers, signalling a positive outlook for newly established GPs. An additional 23% of maiden funds met their targets, similar to the 16% of experienced fund managers that did so. 

Apollo Investment Fund VIII was the largest fund to close in 2013 having exceeded its target. The primarily North America-focused buyout vehicle closed on $18.4bn, which included $17.5bn in investor commitments, surpassing its original target of $12bn and is the largest fund to close since the onset of the financial crisis.

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