US-Focused Private Equity Funds of Funds in Market – September 2012

by Leopold Peavy

  • 20 Sep 2012
  • PE

Fund of funds vehicles typically allow smaller investors to gain exposure to a variety of private equity strategies, enabling them to increase the diversity in their portfolios. Preqin Investor Network currently tracks 159 funds of funds being raised globally. A little more than half of the funds of funds in market (80 total) are US-focused, with 66 of these US-focused funds of funds managed by firms based in the US. A further thirty-three of these fund of funds vehicles are Europe-focused fund, and the remaining 46 target Rest of World.

Our data shows that US-focused funds of funds on the road are currently targeting an aggregate $21bn, and seeking on average $263mn. Europe-focused funds of funds are aiming to raise an aggregate $6bn and are seeking on average $170mn. Funds of funds seeking investment opportunities in Rest of World are looking to raise an aggregate $12bn, with an average fund size of $258mn. Of all the funds of funds in the global market, 9% (14 total) are first-time funds.

The largest US-focused fund of funds vehicles in market include HarbourVest Partners IX - Buyout, which is targeting $1.5bn to invest in primary and secondary buyout funds, and the $1bn HarbourVest Partners IX - Venture, which is targeting investment opportunities in US-focused venture capital funds. Another $1bn US-focused fund of funds, Private Equity Partners XI, has more of a diversified strategy, primarily focusing on the US and Europe with the capacity to invest up to 25% of its capital in direct and secondary investments.

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