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Private Equity Growth Funds in Market – April 2013

by Laura Duce

  • 22 Apr 2013
  • PE

There are currently 222 growth funds in market, collectively targeting $64bn in capital commitments. Of these funds, 125 primarily target Asia, representing 56% of the number of funds in market and the overall target size, with a collective target of $36.1bn. Thirty three of these funds are targeting Europe-based investments, with an aggregate target of $7.8bn, and 31 vehicles are targeting Rest of World investments, seeking $6.8bn in capital commitments. There are 25 growth funds targeting US investments, with a collective target of $7.6bn, and eight growth vehicles have a diversified multi-regional geographic focus.

The majority of these 222 growth vehicles currently in market are being raised by China-based fund managers, with 42 China-based managers targeting collective capital commitments of $15.0bn. Thirty-seven of these funds are being raised by US-based fund managers, collectively targeting $13bn in capital commitments, and 29 of these growth vehicles are being raised by India-based fund managers, with a collective target of $5.7bn.

To date, 101 of growth funds in market have achieved an interim close, raising an aggregate $12.5bn in investor commitments. The average target size for growth funds in market is $309mn, which has decreased slightly over the past 6 months; in October 2012 the average target size was $313mn.

The three largest growth vehicles currently in market are Actis 4, CDH China Fund V and Pine Brook Road Partners II, targeting $3.5bn, $2bn and $2bn respectively. Actis 4 is being raised by the UK-based fund manager Actis, and has a pan-emerging markets geographic focus and diversified industry focus. CDH Investments is raising the CDH China Fund V vehicle, focusing solely on China-based investments with a diversified industry sector focus. Pine Brook Road Partners II is a North America-focused growth fund that primarily focuses on investments in the energy and financial services sectors.

Over the past 12 months, 89 growth funds have held a final close, collecting aggregate capital commitments of $21bn. These funds have an average final close size of $264mn, and 25 of these vehicles were raised by China-based fund managers, garnering collective total commitments of $8.7bn.

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