Private Equity Funds Closed in Q2 2013 that Exceeded their Target Sizes – July 2013

by Laura Duce

  • 09 Jul 2013
  • PE

In terms of aggregate capital raised, Q2 2013 was the strongest quarter since 2008, with 154 private equity funds holding a final close securing an aggregate $122bn. Half of these funds exceeded their original target size, with a further 14% matching their target.

The largest amount of aggregate capital was raised by buyout vehicles, garnering $49.1bn, with an impressive 71% of these funds exceeding their targets. The largest fund type by number of funds was venture capital, with 48% of the 35 vehicles exceeding their targets, raising $6.4bn. Real estate funds were the second largest fund type by number of funds and total capital raised, but a significant 50% achieved less than their target.

Unsurprisingly, in Q2 2013 there was strong negative correlation between the time spent on the road by a fund and the final close size held. Of the funds that spent one to six months in market, the majority (58%) of funds closed exceeded their target size, and an additional 25% matched their target. None of the funds that closed in Q2 2013 after spending more than 36 months on the road exceeded their target.

A significant 40% of funds closed in the quarter being raised by first-time fund managers managed to exceed their market, compared with 51% of non-first-time funds managers, signalling a positive outlook for first-time fund managers. An additional 13% of maiden funds met their targets, similar to the 14% of experienced fund managers that met their targets.

A positive outlook on current fundraising can further be inferred by the percentage of funds that managed to hold a final close exceeding the capital raised by their previous fund in the series; a particularly significant 83% of funds closed in Q2 2013 that exceeded their target size managed to raise a fund larger than the previous in the series.

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