A breakdown of private equity fundraising across the US shows that the top states by aggregate capital raised remain unchanged since the data was last visited in October 2014. Preqin’s Funds in Market online service tracks a total of 380 funds managed by US-based firms that have held a final close in 2015 YTD, raising an aggregate $243bn in capital commitments.
As the above table shows, New York and California top the list, with New York raising $102.5bn from its 84 closed funds, fewer vehicles than closed in California (98). This is likely due to the prevalence of venture capital in California, with many venture capital managers closing funds of a smaller size. Even though California has seen the most funds closed so far in 2015, the state’s average fund size is less than a third of that of New York. The median fund sizes for these two states are surprisingly similar however, showing that the mean average fund size may have been pushed higher by a few very large funds raised by New York managers. For example, the largest fund closed by a US-based manager this year to date is Blackstone Real Estate Partners VIII, raised by the New York-headquartered Blackstone Group. This fund raised $14.5bn, well over its $13bn target. In contrast, the largest fund raised by a California-based manager was Francisco Partners IV, which closed on $2.8bn.
Out of the top five states, Texas has the highest mean average fund size at $1.4bn, although due to the smaller pool of funds closed (21) it may be slightly skewed upward, as the state’s median fund size is only $200mn. EnCap Energy Capital Fund X is the largest Texas-based fund closed in 2015 YTD, raising $6.5bn to invest in the natural resources sector, focusing on oil & gas exploration and production. With a distinct raw materials advantage in Texas, it is no surprise that natural resources funds raised the largest proportion of capital in the state.
Massachusetts continues to be a prominent East Coast player in private equity, largely due to firms based in Boston: managers based in Massachusetts have the highest median fund size for funds closed in 2015 YTD ($256mn), despite a mean fund size of only $690mn. The largest to close this year has been ArcLight Energy Partners Fund VI, a $5.6bn fund dedicated to investments in infrastructure, specifically energy and power assets in North America.