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Preqin Investor Network is a complimentary platform available only to accredited investors, qualified purchasers, and their alternative investment consultants. This database allows all eligible investors to analyze past fund performance and create benchmarks, as well as the ability to search and view free profiles for all funds open to investment across the following asset classes: private equity and venture capital, real estate, infrastructure, and hedge funds.
Preqin is the most quoted souces in Alternative Assets.
Drawing on data compiled for the forthcoming 2015 Preqin Alternative Assets Performance Monitor, Preqin has created league tables of alternative asset fund managers that have most consistently outperformed their peers. The league tables do not seek in any way to endorse these fund managers, but rather to illustrate those that have performed the most consistently in the past.
The global hedge fund industry has seen a $76bn net inflow of assets through the first half of 2015, bringing the size of the industry to $3.22tn. The second quarter saw the greater amount of inflows from investors, with $48bn in Q2 compared to $29bn in first quarter.
Research for Preqin’s latest Investor Outlook has found that four out of five institutional investors invest in at least one alternative asset class. Private equity, hedge funds and real estate are the most targeted alternative asset classes, with over half of investors having an allocation to each of them in their portfolios. Although the benefits vary significantly between asset classes, common reasons cited by investors for holding allocations to alternative assets include diversification, high returns, reliable income streams and inflation hedging characteristics.
The latest Preqin research into infrastructure investment has found that the average deal size has risen 56% between 2013 and 2015 YTD. Transactions completed in 2013 had an average size of $401mn, compared to $626mn for deals done so far in 2015.
Private debt fund managers are currently sitting on a record $185bn in dry powder, capital commitments from investors that are yet to be invested. Fund managers are keen to invest this capital in attractive investment opportunities, as 66% of respondents to a recent Preqin survey of over 100 private debt fund managers indicated they plan to deploy more capital over the next 12 months. Yet managers face intense competition from their peers – over half of survey respondents (51%) noted that they felt competition for investments had increased over the past 12 months, and a third claimed it was harder to find attractive opportunities in the current market.
The latest research from Preqin indicates that an estimated 1,180 zombie funds are being held in institutional investors’ portfolios. This is an increase from the 1,049 estimated by Preqin as of a year ago, and a further increase from the 999 in existence as of July 2013. The value of unrealized assets being held by zombie funds has also risen, from $80.9bn in 2013 to $126.6bn in 2015.
To aid the private equity industry in benchmarking performance, Preqin has launched a new Public Market Equivalent (PME) tool which offers benchmark and fund-level comparison against six public market indexes. These tools overcome the benchmarking difficulties by accounting for the timings of fund cash flows in a public market index, and can be used to analyze and compare private equity performance with public markets on a more meaningful, like-for-like basis.
Preqin’s latest survey of global hedge fund managers reveals that most UK- and Europe-based hedge fund managers are AIFMD-compliant. By contrast, there has been slow uptake among firms beyond the EU’s borders; a quarter of hedge fund managers based across Asia and Rest of World currently comply, and only 15% of firms based in the US.
The hedge fund industry has posted average returns of -0.75% for June, the first month this year of negative performance. Despite this, the benchmark has still returned 4.50% year-to-date. Single-manager hedge funds were not the only fund structures which fared poorly in June; UCITS posted returns of -1.76%, and CTAs made losses of -2.66%, their worst monthly performance since July 2008.
Fundraising in the private debt market has slowed over recent quarters. Twenty-five funds closed in Q2, raising a total of $16.5bn in capital, compared with 26 funds that raised $20.8bn in Q1 2015. This is a further drop from the $23.0bn raised in Q4 2014, and marks the lowest Q2 figure since 2012, when 23 funds raised $8.4bn.
Preqin, the alternative assets industry’s leading source of data and intelligence, is delighted to announce the appointment of Edmond Ho as Chief Revenue Officer. Edmond also joins Preqin's Management Team and will commence his role on 27th July 2015.
Firms managing closed-end private real estate funds have a record $254bn in dry powder available, up 37% from the $185bn in December 2014, and representing the highest amount on record. The increase in uncalled capital available to private real estate fund managers is a result of strong fundraising over the last two years. In Q2 2015, 47 real estate funds closed securing an aggregate $26bn, bringing the 2015 total so far to $60bn. This represents the second highest half year figures for private real estate fundraising since the financial crisis, after H2 2013 when $64bn was raised.
Six unlisted infrastructure funds closed in Q2 2015, raising a combined $4.4bn, a notable decline on the $5.4bn raised in Q1, and the fourth consecutive quarter in which the total capital raised has fallen. Just $9.8bn was raised in the first half of 2015, compared with $24.2bn in the first half of 2014.
The global private equity fundraising environment continued to be slow during the second quarter of 2015, with the lowest amount of capital raised since Q1 2013. A total of 220 funds raised an aggregate $104.7bn globally, down from the 237 funds that closed over the first quarter that raised $128.7bn. Within the North American market specifically, however, fundraising for venture capital funds exceeded that for buyout funds, which has only happened once before in Q1 2012.
The venture capital industry has had a very strong start to 2015. Not only is the fundraising market buoyant, but venture capital fund managers have invested a record $63.0bn over the first six months of the year. This is 48% more than the amount of capital invested through the first half of 2014, and 145% more than the amount of capital invested in Q1 and Q2 2013.
The second quarter of 2015 witnessed 10 large cap buyout deals ($1bn or more in value) across Europe, the highest number since Q2 2008 when 11 took place. This resulted in an increase in aggregate deal value for the region from $20.4bn in the first quarter to $32.4bn in Q2 2015. Globally, there was a total of 755 private equity-backed buyout deals over the quarter, valued at an aggregate $96bn.
Separate account mandates have seen a rise in prominence within the private equity real estate industry over recent years. Preqin tracked 45 separate accounts that were awarded to fund managers in 2014, raising a record $17.8bn in capital. This is up from the $16.1bn awarded to 48 real estate separate accounts throughout 2013. As a proportion of all closed-end real estate fundraising in 2014, separate accounts made up 21% of the total number of real estate funds raised throughout the year, and 18% of the total capital raised – the highest proportion of annual fundraising in any year.
The worldwide “Club” of the largest investors in hedge funds has seen a net migration of 24 investors into the Club over the past 12 months. A total of 51 investors have increased their allocation to the asset class to over $1bn, while 27 investors have seen their allocation fall below the $1bn mark. There are now a total of 227 investors around the globe that have $1bn or more in assets invested in hedge funds, and collectively these investors have $735bn invested in the asset class.
The hedge fund industry has now reached $3.16tn in assets as of the end of Q1 2015, but a growing proportion of these assets are concentrated among a small pool of large managers. The “$1bn Club”, which now includes 570 managers, represents 11% of the total 5,122 single-manager hedge fund managers across the globe. But these firms command a total of $2.78tn of industry capital, which amounts to 92% of the total assets in hedge funds.
The average time that private equity firms have been holding buyout investments in their portfolio has been rising year-on-year since 2008. This reached a record high of 5.9 years for companies exited in 2014, almost two years longer on average than companies sold in 2008. Yet for investments realized so far in 2015, the average holding period has dropped to 5.5 years. This marks the first point that the average holding period for buyout deals has seen a drop since the financial crisis, and is coupled with a strong exit environment which has seen a record number and total value of private equity-backed exits in 2014.
Research conducted for the 2015 Preqin Sovereign Wealth Fund Review found that 45% of sovereign wealth funds active in real estate currently invest less than 5% of their total assets in the asset class. However, all sovereign wealth funds globally have a target allocation of 5% or more to real estate, and 43% have a target allocation to the asset class of 10% or more of their total assets. This suggests that there is potential for significant inflows into real estate as these sovereign wealth funds invest to move towards their strategic targets, particularly as these investors seek ever more globally diversified portfolios.
Preqin’s latest analysis of the risk/return profile of major private equity and private debt fund strategies has shown that direct lending funds have been providing investors with superior returns given their level of risk. These funds, which have increased in prominence since the fallout of the global financial crisis and the reduction in bank lending, are returning 11.4% on average annually. This is only surpassed by distressed debt funds over the same period (vintage 2002-2012), which are returning 12.6%.
The majority of sovereign wealth funds globally have increased their assets under management over the course of 2014. This is despite falling commodity and oil prices, which many of these institutions rely on for funding. The growth in assets, up from $5.38tn in October 2013 to $6.31tn in March 2015, has been driven by continued funding from governments and reserves, as well as from investment returns.
The pace of private equity fundraising slowed in Q1 2015, following a strong end to 2014. The quarter saw the lowest number of funds close in any quarter for over 10 years, although this figure may increase by 10-20% as more information becomes available. This compares to an average of 288 fund closes in each quarter in 2014.
The opening quarter of 2015 has seen the highest quarterly value of private equity-backed buyout deals since Q3 2007, led by the merger between Kraft Foods Group and H.J. Heinz Company. The total value of buyout deals in Q1 2015 reached $97bn, the highest amount since $125bn worth of deals in the third quarter of 2007.
Q1 2015 saw another strong quarter for private equity real estate fundraising, with $29bn raised. More than three-quarters of the capital raised in the quarter was by just three firms however, with Blackstone Group’s record-breaking $14.5bn fundraise contributing half of the total capital alone.
The venture capital industry has delivered another quarter of strong deal making. The amount of capital invested in young companies is up over 50% on the amount of capital invested in the first quarter of 2014, and has even surpassed deal making in Q4 2014, which was the highest on record.
The global private debt market, also referred to as the alternative or non-bank lending industry, is fast approaching $500bn in assets under management. The industry has seen steady growth over recent years, with one of the most significant gains made through 2013, when AUM leapt up 16% in the space of a year. A lot of this growth has stemmed from the development of alternative lending across Europe, a market that has traditionally been dwarfed by the North American private debt industry.
The proportion of institutional investors active in infrastructure looking to make unlisted fund commitments has been steadily falling in recent years. As of the start of 2015, 65% of infrastructure investors tracked by Preqin were searching for new fund investments over the course of the year. Only two years ago, however, 91% of investors were looking to make new fund commitments. Conversely, the proportion looking to make direct investments in assets has grown from 29% of investors as of the start of 2013 to 56% as of the start of 2015.
Hedge fund managers have got off to a strong start in 2015. Following a year which saw the average hedge fund deliver returns of 3.78%, managers have already returned 2.52% on average two months into the year. Given that performance was named as the key concern in the industry in 2015 by investors in a Preqin survey at the end of 2014, managers will have been keen to deliver strong performance early in the year.
Preqin’s latest research into gender equality at single-manager hedge funds reveals the Asia-Pacific region is leading the way. The region employs women in 11.2% of C-level roles, but is closely followed by North America which employs 10.9%. Europe-based managers have the worst representation of women in senior roles, with only 6.6% held by females.
2015 is set to reach an all-time high in terms of private equity secondaries transaction volume, following an estimated $42bn worth of purchases in 2014. Two-thirds of secondaries fund managers recently surveyed by Preqin intend to invest more capital over the course of 2015 than last year. Following a record year for fundraising for private equity secondaries vehicles, managers have a wealth of capital available to spend in the market.
Venture capital firms have made a notable improvement in the hiring of women in senior positions. Almost 15% of senior positions at these firms are held by women, compared to 14.0% at infrastructure firms, 13.6% at real estate firms and only 10.5% at buyout firms. A year ago, venture capital firms ranked behind infrastructure and real estate firms, but ahead of buyout firms, and have seen the greatest improvement over the past year. Despite these positive steps, only 11.7% of leadership roles are held by women in the private equity industry as a whole.
The majority of institutional investors that were interviewed by Preqin at the end of 2014 believe that more needs to be done with regards to the management fees they pay on alternative assets fund investments. Of the five major alternative asset classes – private equity, hedge funds, real estate, infrastructure and private debt – investors named management fees as the area that needed the most improvement with regards to alignment of interests in all asset classes but private debt. Within private debt, it was second behind the amount managers commit to their own funds.
The private real estate industry has seen improving fortunes in recent years. The industry now manages an all-time high of $742bn in assets and generated annualized returns of 16.7% over the last three years. But this has created an environment of stiff competition. Pricing for prime assets is a concern for many in the industry, and 75% of fund managers feel there is more competition for core real estate assets than a year ago. Furthermore, 72% of firms said they have seen an increase in competition for investor capital compared to 12 months ago.
2014 was the strongest year of private equity investments since the global financial crisis, yet the majority of private equity fund managers are looking to invest more this year. Preqin spoke to 260 firms* worldwide in November last year, and 55% claimed they would be investing a higher amount of capital in 2015 compared to last year. A further 35% of managers suggested they would be investing a similar amount as last year.
Preqin today launches our 2015 Global Alternatives Reports, which reveal significant growth in assets held by private equity, hedge fund, private debt, real estate and infrastructure fund managers. Total industry assets now stand at $6.91tn, up from $6.22tn as of this point last year.
Data from Preqin’s forthcoming 2015 Global Hedge Fund Report shows that industry performance ultimately disappointed in 2014. The Preqin All-Strategies Hedge Fund benchmark gained just 3.78% in 2014, the lowest annual return since the 1.85% loss seen in 2011. Furthermore, most hedge funds failed to match the returns made in the previous year, and solid advances were frequently followed by losses as managers struggled to gain momentum.
Preqin and Baxon Solutions have formed a strategic partnership, effective from today. This partnership includes Preqin taking a significant minority stake in Baxon. It will accelerate Baxon’s development and delivery of a comprehensive portfolio management and valuations platform for the private equity industry. The principal aim of the partnership is to combine the alternative assets expertise of both firms to address the rapidly increasing market demand from both GPs and LPs for transparent, accurate and actionable data on their funds and portfolio investments.
Closed-end private real estate funds that focus on debt investments have had a successful fundraising year, raising the largest annual amount of capital ever. A total of 26 debt funds raised a combined $20bn, up from 29 funds raising $16bn in 2013. Aggregate capital raised across all real estate strategies worldwide reached $90bn, just below the $92bn raised in 2013, but is expected to increase by 10-20% as more information becomes available. However, the total number of funds that reached a final close has seen a notable drop-off, with 177 holding a final close in 2014 compared to 239 in 2013, as capital becomes ever more concentrated among a handful of the larger players.
The infrastructure fundraising market in 2014 saw a slight drop in total capital raised, from $44bn in 2013 to $38bn in 2014. Yet the number of funds reaching a final close has seen a significant drop-off; 2013 saw 69 funds reach a final close compared to 42 funds in 2014. As such, the average fund size has reached levels not seen since 2007, with the average fund closed in 2014 topping $1bn. Furthermore, Preqin’s latest research shows that 54% of infrastructure funds that reached a final close in 2014 exceeded their fundraising target. This is up from 37% of funds that closed above target in 2013, and is the highest proportion since 2008. A further 6% of funds closed in 2014 met their fundraising target.
Over the past year, a total of 7,474 venture capital financings were announced globally with an aggregate value of $86.6bn. This represents an 11% fall in the number of financings taking place compared to 2013, but a 58% rise in the aggregate value of deals compared to the previous year. Companies located in Asia and other regions outside North America and Europe have been the primary benefactors of this increase in financing, with the amount of capital invested across these regions up 160% in 2014 compared to deals done in 2013.
2014 represented the highest ever aggregate exit value for private equity buyout fund managers, with a total of 1,604 exits globally valued at $428bn. This is up over 30% on the total value of exits in 2013, and is the highest ever annual value of private equity-backed buyout exits. This has resulted in a significant increase in the level of capital being returned to buyout fund investors, which had almost surpassed the full-year 2013 amount as of June 2014 (the latest data available). The total value of deals in 2014 reached $332bn globally, the highest annual amount since 2007.
The private equity fundraising market in 2014 has seen a total of $486bn in capital commitments spread between the lowest number of funds in any year since 2009. The amount of capital raised is on track to match the amount of capital raised in 2013 ($531bn), as Preqin expects the 2014 fundraising figure to increase by 10-20% as more information becomes available. For the funds that did close, however, the average time to reach a final close has fallen by two months; funds that closed in 2014 took an average of 16 months, compared to 18 months on the road for funds closed in 2013. Given that the fundraising market is still so competitive, with a record 2,252 funds on the road seeking capital, it is likely that managers may continue to struggle to hold a final close in the coming year.
Preqin’s latest research shows the private equity real estate industry continued to grow in 2014. The aggregate assets under management of closed-end private real estate funds stands at $742bn as of June 2014, an increase of $50bn since December 2013. Total assets under management have increased by 63% since December 2010, with a large proportion of this growth accounted for by the increase in the value of real estate assets still being held by fund managers. The value of the assets held by managers has risen from $314bn in 2010 to $567bn in 2014.
For over a decade since the dot-com crash, the venture capital industry has experienced largely lacklustre returns which have led to tough fundraising conditions for all but a select group of top-tier managers. More recently, however, there have been encouraging signs across the industry, with returns significantly improving and fundraising picking up, particularly as market conditions become more favourable.
Direct lending funds have continued to gain traction in the private debt marketplace, and are the prevailing strategy for private debt fund managers established since 2008. Almost three-quarters of institutional investors active in the private debt space plan to allocate fresh capital in the coming year to direct lending funds, which are often considered a better fit for more conservative investors in the private debt market, given their similar structure to fixed income investments compared to more private equity-style methods such as mezzanine and distressed debt funds.
In recent years there has been a clear upward trend in fund managers successfully attracting more capital for West Coast-focused vehicles, with the aggregate capital raised by these funds increasing year on year from $0.8bn raised by 11 funds closed in 2011 to $2.7bn raised by 18 funds closed in 2013. 2014 so far has seen 11 West Coast-focused private real estate funds reach a final close, having raised an aggregate $1.6bn in capital commitments.
2014 has witnessed the largest amount of capital raised by Europe-focused funds since 2007, demonstrating an overwhelming growth in appetite for European real estate, and opportunistic or distressed opportunities in particular. Over €21bn has been raised so far this year for Europe-focused real estate funds, more than in any other year except 2007, when €23bn was raised. As a result of the significant growth in European fundraising over the past 12 months, dry powder for Europe-focused funds currently stands at an all-time high of €52bn – a 44% increase on December 2013.
Since the fallout of the financial crisis in 2008, the need for alternative providers of credit to companies – both public and private – has increased drastically given the restrictions on lending imposed on more traditional sources of debt financing. This huge growth of the private debt sector and subsequent demand for quality data and information has led Preqin to launch a new product, Private Debt Online, detailing fund managers, fundraising, investors and more active in the alternative lending space.
In Q3 2014, 185 private equity funds held a final close and secured an aggregate $73bn, a figure which is expected to increase by 10-20% as more information becomes available. This is the lowest quarterly amount of capital raised in 3 years, when $66bn was secured by funds closed in Q3 2011. Despite this, fundraising for the whole of 2014 is still likely to be strong following $111bn raised by funds closed in Q1 and $143bn in Q2.
August saw the largest private equity-backed buyout investment as well as the largest exit occur across the whole of 2014 to date. The add-on deal by 3G Capital, combining their current investment in Burger King with that of Canadabased Tim Hortons Inc. for $11.5bn, is the largest private equity deal in 2014. In addition to this, the trade sale of Alliance Boots GmbH by a consortium of private equity fund managers for $15bn registered as the largest private equity-backed buyout exit so far this year.
Preqin’s latest analysis of global venture capital investment activity shows that a total of $59bn has been invested in 5,272 deals globally in 2014 so far, compared to $37bn invested in 5,940 deals over the same period in 2013. While activity for the third quarter is below that of Q2 2014, the amount of capital invested is 45% higher than during the same quarter in 2013.
Closed-end private real estate funds have a record $220bn in dry powder available to invest, up from $186bn in December 2013, representing the highest amount on record. The majority of capital is accounted for by North America-focused funds, with $113bn of dry powder focused on the region. Europe-focused funds have $66bn of dry powder, with Asia-focused funds and funds focusing outside of these three regions having $32bn and $9bn in uncalled capital respectively.
Preqin’s latest research shows that infrastructure funds that have reached a final close so far this year have raised $1bn in capital on average, representing the highest average fund size seen since 2007, when funds raised an average of $1.1bn.
Preqin has taken a look at how the hedge fund industry has changed in the six years since the global financial crisis. The most significant development is the volume of funds that have launched since the crisis, even in the face of increasing regulation and industry criticism.
Preqin’s latest research into the Asian private equity industry has highlighted the accelerated growth in venture capital investment throughout the region in recent years. After a number of years of slower fundraising and investment activity across the continent, venture capital deal flow across Asia, particularly in more emerging economies such as those in Northeast and South Asia, has increased significantly. The level of investment in buyout opportunities across Asia has also grown in 2014, with $29.6bn of investment so far in 2014 compared to $25.7bn in the whole of last year.
Following the decision by the California Public Employees’ Retirement System (CalPERS) to withdraw from their exposure to hedge funds, Preqin looks at the wider trends of US state pension plans’ exposure and activity in the hedge fund asset class.
According to Preqin’s latest performance benchmarks, CTA hedge funds have had their strongest monthly performance in over three years, posting returns not seen since April 2011. This performance has taken the benchmark to its highest August year-to-date figure since August 2010, a year in which the benchmark ended up posting 15% returns. CTA funds have had a difficult few years, struggling to generate annual returns in excess of 2% since the start of 2011. This monthly return in August, however, marks the fifth consecutive month in the black for the CTA benchmark.
Drawing on data from Preqin’s forthcoming 2014 Private Equity Fund Terms Advisor, it is apparent that private equity fund managers are not doing enough to appease their institutional backers with regards to the fees they charge. Management fees, traditionally charged at 2% of capital committed to a fund each year, are mostly used to cover the operating costs of a fund manager. Investors, however, have been calling for these fees to be reduced, and a greater emphasis placed on performance-related fees, in an effort to improve the alignment of interests between fund managers and investors. Management fees have consistently been named by investors as the area in which alignment of interests can be most improved in Preqin’s historical investor surveys.
Using data compiled for the 2014 Private Equity Performance Monitor, Preqin has constructed a league table of private equity real estate managers that have most consistently outperformed their peers. The league table does not seek in any way to endorse these fund managers, but rather to illustrate those that have performed the most consistently in the past. Thirteen of the 26 fund managers to feature in this year’s list are new entries, and only two of the 20 largest private equity real estate firms globally are listed among the most consistent performing managers.
Preqin’s latest survey of more than 100 hedge fund managers, conducted in June 2014, reveals that 73% of respondents indicated competition in fundraising had increased in the past 12 months. However, 64% of fund managers that run pooled products noted that their assets in these products had increased in the first half of the year. Similarly, 61% and 50% of firms that manage alternative UCITS and alternative mutual fund products respectively reported net inflows to these vehicles.
Preqin’s latest analysis of investment activity within the global infrastructure space has shown that prices for assets traded so far this year are at the highest level on record. More than one-third of transactions completed in 2014 YTD were valued at more than $500mn, with the average investment valued at $523mn. While the average size of deals taking place has risen significantly, the number of investments being completed has fallen in recent years.
Preqin’s latest survey of institutional investors globally that are active in alternative assets indicates that these institutions are growing increasingly proactive with their alternative asset portfolios. Almost a third (30%) of investors have grown their investment teams sourcing private equity, hedge fund, real estate and infrastructure opportunities over the past two years, and a similar proportion expect them to grow over the next two years.
Capital distributions to private real estate fund investors reached an all-time high in 2013, with a total of $138bn returned to investors as a result of managers selling assets. This is more than double the $67bn distributed to investors throughout 2012.
Preqin’s latest research has shown that institutional investors are enjoying good returns from their private equity portfolios with capital distributions in 2013 reaching $568bn. Strong public equity markets, good credit conditions and general positive exit activity have provided the opportunity for private equity fund managers to return the greatest ever amount of capital back to their investors last year.
Preqin, the alternative asset industry’s leading source of data and intelligence, is delighted to announce the appointment of David Brierwood as a Non-Executive Director. He joined the Board with effect from 12 August 2014.
Preqin interviewed 150 fund managers and 100 institutional investors in June 2014 to ascertain their outlook on the hedge fund industry as we entered the second half of the year. When asked to predict the end of year benchmark value in 2014, 99% of hedge fund managers predicted the All Hedge Funds benchmark would be 11% or less, below the 11.69% hedge funds returned in 2013.
Drawing on data compiled for the forthcoming 2014 Preqin Private Equity Performance Monitor, Preqin has created league tables of private equity managers that have most consistently outperformed their peers. The league tables do not seek in any way to endorse these fund managers, but rather to illustrate those that have performed the most consistently in the past. All three fund strategies that have been presented – buyout, venture capital and funds of funds – have seen new entries achieve the highest possible score this year compared to similar league tables created in 2013.
Only a small proportion of fund managers active in infrastructure and real estate think that AIFMD regulations will have a positive impact on their firm and industry, following a recent survey of over 140 managers active in the asset classes. Nevertheless, almost half (49%) of infrastructure managers and 34% of real estate managers worldwide indicated to Preqin in June 2014 that they would be compliant by the AIFMD’s July 2014 deadline.
New research from Preqin, based on a survey of 40 private equity investment consultants, shows that when naming traits a fund manager needs to possess in order to meet its fundraising target – and therefore whether it is worth expending time and resources on – investment consultants prioritize performance track record at a team level. However, when looking for warning signs that a manager will not fundraise successfully, a firm’s performance track record, rather than a team’s, is their highest priority.
As the 22 July 2014 authorization deadline for the AIFMD approaches, new research from Preqin, based on a survey of 150 hedge fund managers, reveals that three times as many hedge fund managers (59% of managers surveyed) think that the AIFMD will have a negative impact on the industry compared to those that think it will have a positive impact (20% of managers surveyed). This is an increase compared to the 53% of managers which thought the AIFMD would have a negative effect on the hedge fund industry in December 2013 and the 29% that stated the same in December 2012.
Improved performance in May and June has provided a more positive outlook for the hedge fund industry following the worst start to a year since 2008. Second quarter performance was almost twice as strong on average compared to Q1 2014, taking year-to-date (YTD) returns to 3.86%. The hedge fund benchmark is behind the 4.28% YTD returns as of the end of Q2 2013, and investors may be expressing concerns that three of the six months in 2014 so far have seen negative average returns.
Preqin, the alternative assets industry’s leading provider of research and data, has announced that as of today its hedge fund data will be available on AlternativeSoft, the award-winning manager selection and portfolio construction platform.
Preqin's latest research shows that the capital raised by closed-end private real estate funds in H1 2014 was higher than that raised in H1 2013. However, the number of funds closed in H1 2014 fell by 30% compared to H1 2013, evidence that the capital raised by closed-end private real estate funds is increasingly concentrated among fewer managers.
Preqin’s latest research shows that there are a record 149 infrastructure funds in market as of the start of Q3 2014, targeting an aggregate $90bn. However, the number of funds holding final closes has declined in 2014 so far compared to last year; just 10 infrastructure funds have closed in 2014 to date, only 42% of the number of funds closed in H1 2013.
The value of private equity-backed buyout exits in the second quarter of 2014 saw a notable jump up from Q1 2014, with 392 exits valued at $138bn in Q2 2014 compared to 331 exits valued at $90bn in the first quarter. This is the highest quarterly exit value for any quarter in the period since the financial crisis, and the second highest number of exits in the same period, behind Q4 2013 which registered 405 exits.
A total of 187 private equity funds held a final close in Q2 2014 securing aggregate capital commitments of $127bn, a figure which is expected to increase by 10-20% as more information becomes available. Aggregate capital secured by private equity funds was higher compared to the $104bn secured by funds closed in Q1 2014 and has remained above the $100bn mark for the fourth consecutive quarter, although the quarterly number of funds closed continues to slide.
Preqin’s latest analysis of global venture capital investment activity has shown that the average value of Series D and later stage deals that occurred in H1 2014 was $64.1mn, a significant increase on the average size of late stage deals done in 2013, which stood at $34.4mn.
New research from Preqin shows that 75% of private real estate firms say competition for assets is even greater than last year. Closed-end private real estate funds have an all-time high of $206bn of equity available to invest in real estate opportunities, and 63% of private real estate firms plan to deploy more capital in real estate assets in the next 12 months compared to the past 12 months, but they face increased competition when looking to put this capital to work.
New research from Preqin shows that although discretionary funds tend to outperform systematic funds when markets are rising, systematic funds can provide benefits in terms of lower volatility and higher risk-adjusted returns. As such, systematic funds are generally perceived as providing good downside protection to investors in down markets. Given that a recent Preqin survey of investors highlighted that the majority invest in hedge funds for uncorrelated returns, risk-adjusted returns or reduced portfolio volatility, rather than high absolute returns, systematic funds can be an attractive prospect to certain investors.
New research from Preqin shows that the majority of hedge fund investors are not looking for double digit returns from their hedge fund investments; instead, Preqin’s survey of over 100 institutional investors shows they are looking for their hedge fund portfolios to produce returns uncorrelated to equity markets (59% of investors named this), produce robust risk-adjusted returns (53% of investors) and dampen portfolio volatility (46% of investors). Sixty-seven percent of hedge fund investors look for returns between 4% and 6%; only 6% of investors seek returns over 10%.
Recent research from Preqin reveals that 8 private equity secondaries funds have closed in 2014 so far (as of 3 June), raising an aggregate $13bn in investor commitments. This is more than triple the $4.2bn raised by 6 secondaries funds closed in the same time period in 2013. The average size of secondaries funds closed in 2014 so far is $1.6bn, more than double the average size of $729mn of funds closed in 2013.
Recent research from Preqin reveals that activism is becoming a more widely utilized approach in the hedge fund industry, with 2013 seeing the highest number of activist hedge fund launches since 2007, at 28 funds. In terms of performance, activist funds returned an average of 11.82% in 2013, ahead of the overall hedge fund benchmark which returned 7.88%.
The latest edition of Preqin’s Real Estate Spotlight reveals that the 20 private real estate managers that have raised the most capital in the last five years account for a considerable proportion of global private real estate spending power. These firms hold $69bn of available dry powder, the capital that has been committed to funds by investors but is yet to be spent, out of the total $215bn available to the global closed-end private equity real estate industry.
The “$1bn Club” of the largest hedge fund managers represents just under 11% of the 4,621 active managers worldwide. New York is the undoubted home of this “$1bn Club”, with 174 of these firms headquartered there representing a total of $938bn in AUM. The May 2014 edition of Preqin’s Hedge Fund Spotlight also shows the importance of investors allocating at least $1bn to hedge funds. There are currently 203 institutional investors in this “$1bn Club”, an increase of 46 from a similar study in May 2013, and these firms represent approximately $650bn in terms of combined capital allocated to hedge funds.
Infrastructure deals in 2013 were, on average, financed by the highest level of debt ever recorded, new research from Preqin shows. While the level of deal activity for infrastructure assets has remained fairly steady over recent years, the amount of debt financing for these deals has been increasing, with estimated aggregate leverage in 2013 amounting to a record $256bn compared to $220bn in 2012.
Preqin’s latest edition of Private Equity Spotlight reveals that women account for 22% of senior private equity investment professionals at institutional investors, a notably higher proportion than at private equity firms, where women account for just 11% of senior roles. Despite women accounting for a greater proportion of senior private equity professionals at institutional investors than at private equity firms, women are still underrepresented in the industry.
Preqin’s latest Real Estate Spotlight reveals that the number of private real estate debt funds in market has increased year on year since 2010, with 53 debt funds currently on the road targeting aggregate capital commitments of $22bn, compared to 26 funds targeting a total of $10bn in May 2010. The majority of capital currently targeted (60%) is for European debt investments, with many fund managers looking to capitalize on the vast availability of debt opportunities in the region.
Data from Preqin’s Hedge Fund Analyst shows that the majority of European hedge fund managers that have set up business over recent years have been in the UK. The UK is also the most prominent country in terms of hedge funds being launched in Europe, representing approximately 50% of all known European hedge fund launches in 2013 and 2014 YTD.
Institutional investors are becoming an integral source of direct investment for infrastructure projects. Preqin’s latest research estimates that these institutions have invested directly in infrastructure deals valued at a total of $237bn over the course of 2012 and 2013, compared to an estimated $202bn over the two years prior. Since 2007, the value of transactions involving direct investment by institutional investors has accounted for approximately 34% of the total value of capital invested in infrastructure assets. Furthermore, these institutions have been active direct investors in almost a quarter (22%) of all infrastructure transactions over the same period.
New research from Preqin demonstrates that despite a greater concentration of capital being raised among larger private real estate funds in recent years, smaller funds have often outperformed larger funds. Funds of $1bn or more in size raised 56% of the total capital raised in 2013, compared to 29% of capital the year before, despite the relative outperformance of smaller funds in recent years. The heightened risk that often accompanies an investment in these vehicles, however, is likely to account for the low levels of current investment in smaller managers.
Data from Preqin’s Hedge Fund Analyst reveals that hedge funds have suffered their worst first quarter in terms of performance since 2008, with the Preqin All Hedge Fund Strategies benchmark up 1.23% year-to-date (YTD). This is in contrast to both 2012 and 2013 when hedge funds achieved their highest returns in Q1, with quarterly returns of 6.07% and 3.76% respectively.
New research from Preqin reveals that 25 first-time funds achieved a final close in Q1 2014, securing an aggregate $5bn, the lowest quarterly amount in the period since 2008. This figure equates to just 5% of total capital raised by all private equity funds closed in Q1 2014, compared to 7% for funds closed in 2013 and 13% for funds closed in 2008. This is worrying news for the 641 first-time managers actively seeking to raise their first funds, targeting a combined $141bn.
Preqin’s recent survey of more than 150 private equity and hedge fund managers reveals that these firms have been slow to take advantage of the marketing opportunities presented by the JOBS Act, which allows them to advertise and perform general solicitations to showcase their funds to a larger number of potential investors. Only 4% of hedge fund managers and 5% of private equity managers surveyed said they have registered to market under the JOBS Act.
New research from Preqin shows that investors in private real estate are increasingly moving up the risk/return spectrum, with a significant 59% of the real estate investors that are searching for new funds in the year ahead planning to target opportunistic funds, compared to 47% in the 12 months following Q1 2013. There has been a corresponding decline in interest in the lower-risk core strategy, with only 35% of investors searching for new funds in the next 12 months expecting to invest in core funds, down from 56% of investors in Q1 2013.
The latest quarterly research from Preqin shows that although only five unlisted infrastructure funds closed in Q1 2014, the aggregate capital raised represents a solid quarter, with the total capital secured exceeding the amount raised in Q2 or Q3 2013, but falling short of the $20.4bn raised by the 22 funds which closed in Q4 2013. Capital raised over the last 12 months by unlisted infrastructure funds amounts to a total of $39bn, similar to the aggregate $37bn raised in the previous 12 months.
In Q1 2014, there were 1,402 venture capital financings globally with an aggregate value of $15.6bn, representing the highest quarterly value since the financial crisis in 2008. This surpasses the previous high of $14.9bn in Q2 2011 and is a significant increase from $10.0bn for the first quarter of 2013.
New research from Preqin shows that closed-end private real estate fund managers have $110bn of equity available to make new investments in North America as of March 2014, an all-time high and an increase on the $106bn in dry powder available as of December 2013 and $89bn as of December 2012.
New research from Preqin reveals that Q1 2014 was the most successful quarter ever in terms of Europe-focused closed-end private real estate fundraising, with €8.8bn raised by nine funds that held a final close, compared with €8.2bn in Q2 2007 and €7.5bn in Q2 2008; in the most recent quarter, Q4 2013, only €3.4bn was raised by seven private real estate funds that closed in the quarter targeting Europe. A significant proportion of the Q1 2014 total was raised by Blackstone Group’s Blackstone Real Estate Partners Europe IV, which held a final close on €5.1bn in March and is the largest Europe-focused closed-end private real estate fund of all time.
The global private equity fundraising industry has had the strongest start to a year since the global financial crisis of 2008. A total of 174 private equity funds reached a final close during Q1 2014 raising an aggregate $95bn in capital, the largest amount of capital raised since $173bn was raised by the 308 private equity funds that closed in Q1 2008.
An increased level of global private equity-backed buyout investment over the previous two quarters has been primarily brought about by strong investment activity in North America. A total of 672 private equity-backed buyout investments were made globally in Q1 2014 totalling $79bn in value, compared to 769 investments valued at $61bn in Q4 2013.
New research from Preqin’s Hedge Fund Analyst reveals that mid-sized hedge funds were the best performers in 2013 compared to other fund sizes. Mid-sized hedge funds with assets under management (AUM) of $100-499mn and $500-999mn posted 12-month average returns over 2013 of 13.79% and 13.71% respectively, beating large funds (AUM of $1-5bn) and small funds (AUM of less than $100mn), which posted 12.08% and 11.45% respectively.
Preqin’s global survey of over 100 hedge fund managers in December 2013 showed that managers have frequently changed the service providers working on their funds, with almost half of respondents indicating they had switched service provider at least once since their fund’s inception. Fund administrators and prime brokers are the most frequently switched provider, and most commonly, dissatisfaction with the quality of service provided was the reason given by fund managers for changing their service provider.
Using data taken from Preqin’s Hedge Fund Analyst, hedge funds added gains of 1.72% in February which takes the industry benchmark to 1.42% for the year to date. Despite gains of over 2% for some hedge fund strategies, hedge funds lagged wider equity markets and indices, such as the S&P 500 which was up over 4% in February 2014.
Preqin’s recent surveys with 140 private equity investors and 80 private equity fund managers worldwide reveal that private equity co-investments are becoming increasingly significant. 52% of investors plan to increase their coinvestment activity in 2014, while 31% of fund managers expect to offer more co-investment opportunities in the year ahead.
New research from Preqin demonstrates that despite an uncertain economic outlook for many Asian economies, appetite for Asian private real estate has grown among investors based in North America and Europe, as well as Asia. North America- and Asia-based real estate investors have shown the most significant increase in appetite for Asian investments, with 17% of investors based in North America focusing on Asian investments in February 2014, compared to only 9% in July 2013; similarly 71% of Asia-based investors are targeting the region in the year ahead as of February 2014, compared to 57% in July 2013.
Over the course of a year, the proportion of senior positions at private equity buyout firms globally that are being held by women has only increased from 8.7% to 9.0%. For venture capital firms, the proportion has not increased and has held steady at 11.2%. Real estate and infrastructure fund managers have seen the most notable changes, with the proportion of female employees holding senior positions at real estate firms increasing by 1.5 percentage points and at infrastructure firms by 1.2 percentage points.
Emerging private real estate managers (defined by Preqin as raising their first or second real estate fund) face an extremely challenging fundraising environment. Emerging real estate managers accounted for just 18% of capital raised globally by real estate funds closed in 2013, compared to 21% in 2012 and 34% in 2011.
New research in Preqin Special Report: Private Equity Funds of Funds shows that it is becoming an increasingly challenging fundraising environment for private equity fund of funds vehicles, with only 72 of these funds closing in 2013 raising an aggregate $12bn, compared to 87 funds closing on an aggregate $16bn in 2012 and a high of 164 funds closing on a total of $58bn in 2007. As a result many fund of funds managers are diversifying their activities and are starting to offer separate accounts to attract investors to their services. 65% of private equity fund of funds managers surveyed by Preqin stated that separate accounts would be as or more important to their investment activity in the next 12 months than commingled funds.
Latest figures from Preqin Investor Network reveal the extent to which the dynamics of fundraising have evolved in the current marketplace. Preqin’s latest industry analysis reveals 51% of institutional investors are now actively seeking out investments through proactively contacting fund managers, with 5,600 investment professionals using Preqin’s platform to source potential investments.
Since the launch of Preqin’s fund marketing platform in November 2013, which provides overview information on all 2,100 funds in market, 200 funds, targeting a total of $50bn, have signed up to directly engage approaches from accredited investors on the Investor Network, accounting for almost 10% of funds being raised. More funds are using the platform to help with fundraising with each passing week.
Preqin’s recent survey of unlisted infrastructure fund managers worldwide reveals that the vast majority (71%) expect to deploy more capital in 2014 than in 2013. With fund managers sitting on a record $98bn in dry powder and 44% of fund managers planning to invest significantly more capital in the year ahead compared to 2013, there is likely to be a substantial increase in the amount of capital invested in infrastructure assets in 2014.
Preqin’s global survey of over 100 hedge fund managers at the end of 2013 showed that managers also saw inflows from institutional sources; 41% reported an increase in assets coming from institutional coffers. The combined effect of strong performance, institutional inflows and the return of private wealth capital has led to the industry topping $2.6tn in assets, growing by more than $300bn in 2013.
According to Preqin’s Hedge Fund Analyst, hedge funds made a loss of 0.17% in January 2014, the benchmark’s first month in negative territory since August 2013. The decline in equity markets led to negative returns posted by long/short funds; however these funds did outperform the S&P 500 Index, which was down more than 3.5% for the month. The best performing hedge fund strategies for January were relative value and event driven strategies, with these benchmarks up 0.77% and 0.66% respectively.
According to Preqin’s Hedge Fund Analyst, hedge funds made gains of 11.08% for the 12-month period ending 31 December 2013, ahead of the 10.13% returned in 2012, and the benchmark loss of -1.93% in 2011. Investors are largely satisfied with the performance in 2013; eighty-four percent of investors interviewed for the 2014 Preqin Global Hedge Fund Report stated that returns expectations had been met or exceeded in 2013.
Preqin today launches our 2014 Global Alternatives Reports, which reveal the global alternatives industry has shown significant growth in assets held by private equity, hedge fund, real estate and infrastructure fund managers. This is following a year of improving exit environments, strong performance and increased fundraising levels, all stemming from even greater appetite for alternatives from investors; more than 80% of investors in each asset class felt their investments had either met or exceeded expectations over the previous 12 months, and over 30% intend to increase their allocations over the next 12 months.
Following the recent significant final close of Apollo Investment Fund VIII, the largest buyout vehicle to have reached a final close since the Global Financial Crisis in 2008, Preqin has taken a closer look at the private equity buyout fundraising market. In the factsheet below are key figures including an updated table of the top 10 buyout funds closed ever and the largest buyout funds currently in market, as well as charts examining historical fundraising, the changing average size of final closes, and a breakdown of buyout fundraising by fund size.
The global unlisted infrastructure industry has seen a successful year in terms of fundraising, building on the growth seen throughout 2012. With almost 55% of funds that closed in 2013 achieving or exceeding their initial target, and almost 50% of funds in market having already reached at least one interim close, there is significant momentum within the infrastructure fundraising market going into 2014.
In the past year, more venture capital has been in European companies than in any other year since 2007, when Preqin began comprehensively tracking this data. The €6.3bn ($8.3bn) is a significant increase on the €4.6bn ($5.9bn) invested throughout 2012, and is a clear indicator that significant growth and confidence is returning to the continent.
The average size of private real estate vehicles which held final closes in 2013 was $511mn, the highest ever recorded by Preqin. This comes at a time when fundraising levels are at a five-year high, and investor sentiment towards the asset class is positive, but challenges still remain; far fewer funds were raised in 2013 compared to the year before, funds are taking 19 months on average to reach a final close, and capital raised is being concentrated among fewer larger managers.
Private equity buyout firms have had their strongest year of deal making since before the global financial crisis, announcing 2,830 investments valued at $274bn. Although this is the highest value of buyout investments since 2007, the number of deals taking place has actually fallen by 11% from the year before. The exit environment has also improved in 2013, with the largest number of private equity-backed exits taking place since 2006, with the aggregate value of exits at $303bn.
Private equity funds closed in 2013 secured the highest amount of capital in any year since the global financial crisis; the previous high point was when $688bn was raised by funds closed in 2008. Preqin’s research shows that this growth in capital raised has been led by strong fundraising activity for North America- and Europe-focused funds, while funds focused on Asia and other regions have seen a significant drop in fundraising levels.
Preqin data indicates that current dry powder, capital committed to private equity funds but still yet to be invested, is at a record level, exceeding the previous record high seen before the onset of the global financial crisis in 2008. While fundraising throughout 2013 has seen notable growth, and there has been an increase in the number and value of exits, deal volume has stayed relatively flat for three consecutive years. The aggregate value of buyout investments globally totalled $264.4bn in 2011, $263.8bn in 2012 and $265.8bn in 2013 YTD, provoking concerns of private equity firms’ ability to deploy all the capital they have raised from investors.
In November 2013, Preqin interviewed 148 institutional investors with a total of more than $60bn invested in hedge funds to ascertain their outlook on the industry for 2014. These surveys form an important part of our forthcoming 2014 Preqin Global Hedge Fund Report. Early results of these interviews show that more investors stated hedge funds have exceeded their expectations than in any previous Preqin study.
New research from Preqin released in the December issue of Real Estate Spotlight reveals that, despite the 359 institutional investors that have $1bn or more allocated to real estate representing only 9% of the number of institutional investors committing to real estate, they account for a significant 84% of total capital allocated to the asset class. With the majority of capital invested in real estate coming from such a small pool of institutions, private real estate fundraising is even more competitive, and it is even more difficult for fund managers to get in front of the right investors to raise capital.
The average emerging manager long/short fund launched since 2007 delivered annualized net returns of 8.80% in its first three years of trading, compared to an annual rate of 5.38% from newly-launched funds managed by established firms.
New research from Preqin, featured in Preqin Special Report: European Infrastructure, shows that the capital raised for Europe-focused unlisted infrastructure funds has more than tripled since 2011, from 11 funds raising an aggregate €2.6bn that reached a final close 2011 to 13 funds closed in 2013 so far that have raised an aggregate €9.1bn. As of November 2013, there are a record 58 Europe-focused unlisted infrastructure funds currently being marketed to investors, targeting an aggregate €26.1bn in capital commitments.
In light of some highly successful venture capital exits in recent years, the industry has witnessed aggregate capital invested in angel/seed venture capital deals globally increase significantly, as fund managers try to seek out the next ‘home-run’ investment. $1.1bn was invested in 1,313 angel/seed deals between January and November this year, compared to $633mn in 788 deals during the same time period in 2011.
Research released in the November edition of Preqin’s Infrastructure Spotlight reveals that 49% of infrastructure investors surveyed by Preqin disagree or strongly disagree that fund managers’ and investors’ interests are properly aligned when it comes to fund terms and conditions. This proportion is significantly higher than for any other alternative asset class; in comparison, 36% of institutional investors in hedge funds, 33% of institutional investors in private equity and 28% of institutional investors in private real estate funds disagree that fund manager and investor interests are properly aligned.
Preqin’s performance data shows that US-focused closed-end private equity real estate funds specializing in investments in specific sectors, such as student housing or industrial assets, have outperformed those that invest across a broader range of sectors. While more than half, 58%, of US-focused sector-specific funds across vintage years 2000 - 2010 beat the median benchmark, only 47% of diversified funds achieved the same. Preqin defines sector-specific funds as those focusing on a single property type, with diversified funds classified as those targeting a two or more sectors.
In light of the recent significant final close of Brookfield Infrastructure Fund II, Preqin has taken a closer look at the infrastructure fundraising market and released key figures in the factsheet below, including an updated table of the top 10 infrastructure funds closed ever and the largest unlisted infrastructure funds now in market, as well as charts examining historical fundraising, the changing average size of final closes, and what proportion of infrastructure funds are achieving their fundraising targets.
Preqin’s Hedge Fund Analyst database reveals that CTAs posted negative returns for the fifth month in a row in September, bringing the strategy’s year-to-date performance to -2.45%. Over the last 12 months, CTAs have produced average net returns of -3.77%.
The latest data from Preqin reveals that unlisted infrastructure funds have an all-time high of $93bn in capital available for investment in infrastructure, or dry powder, as of October 2013, a 33% increase compared to the $70bn available to unlisted infrastructure funds in December 2010.
New research released in Preqin Quarterly Update: Hedge Funds, Q3 2013 reveals that Q3 overall was a good quarter for hedge fund performance, with figures posted in July and September 2013 representing two of the three strongest months for returns from hedge funds in 2013 so far. Hedge funds posted net gains of 3.24% in Q3 2013, taking the overall benchmark to 7.17% for the year, just short of the 7.37% posted by hedge funds as of September 2012, indicating 2013 could be set to match 2012.
New research in the 2014 Preqin Sovereign Wealth Fund Review reveals that sovereign funds globally have added over $750bn to their total assets under management over the last year, from $4.62tn in 2012 to $5.38tn in 2013. This growth, which is the largest annual increase in total sovereign wealth fund assets since Preqin began tracking this information, can be accounted for by both the number of new sovereign wealth funds formed over the last few years, as well as capital injected into existing sovereign wealth funds.
Preqin’s latest research, based on a survey of over 100 active institutional investors in private equity, real estate and infrastructure, reveals a clear disconnect between what information fund marketers are providing at the initial marketing stage and what investors want to see. Investors were most critical of the way fund marketers presented performance track record in initial marketing documentation, with 72% stating that this data was average or worse.
A total of 666 private equity-backed buyout deals were announced in Q3 2013 valued at an aggregate $60bn, representing a decrease in aggregate value compared to Q2 2013 when 654 deals were valued at $67bn. However, the aggregate value of private equity-backed buyout deals so far in 2013 represents a 19% increase compared to the same period in 2012.
The number and aggregate capital sought by unlisted infrastructure funds on the road has reached an all-time high, with 145 funds seeking $97bn in capital commitments, demonstrating fund managers’ confidence in their ability to raise capital. Encouragingly, over 50% of the funds in market have already held an interim close, raising a combined $26bn towards their aggregate target capital.
Preqin’s data shows 179 private equity funds closed in Q3 2013, securing an aggregate $87bn, a figure which is expected to increase by 10-20% as more information becomes available. A total of 606 funds have closed so far in 2013, which is less than the 684 funds which closed between Q1 and Q3 in 2012.
The $18bn raised by private equity real estate funds holding final closes in Q3 represented a strong quarter for fundraising, with the aggregate capital raised by funds closed in Q2 and Q3 2013 reaching a combined $39bn, a healthy 56% increase on the $25bn raised in the same 6-month period last year. Furthermore, an aggregate $46bn has been raised by private real estate funds in 2013 so far, compared to $38bn raised in Q1 to Q3 2012.
Preqin’s data shows that venture capital activity slowed in Q3 2013, with 1,378 deals valued at a total of $10.8bn, a drop from the 1,504 venture capital deals announced in Q2 2013 valued at $11.1bn. This is the lowest quarterly number of deals announced since Q4 2011, when 1,271 deals were announced valued at $10.5bn.
Preqin’s Hedge Fund Analyst database reveals that event driven was the only hedge fund strategy to produce positive returns in August (+0.49%), with all other single-manager hedge fund strategies falling back into the negative, with a benchmark return for all single-manager hedge funds of -0.08% in August.
New research featured in Preqin’s latest special report reveals that despite the prominence of growth investment in the Asian private equity market, other strategies, particularly buyout, have an increasing presence in Asia; as it matures, the private equity market in the region is increasingly mirroring the diversity of fund strategy seen in North America and Europe.
New research in Preqin’s latest special report on the US private real estate fund management industry shows the equity invested by closed-end private real estate funds in new opportunities in the US reached $67bn in 2012, almost the same amount as the peak in 2007, when $68bn was invested.
New research released in Preqin’s latest special report reveals that the US hedge fund industry has recovered faster and more strongly than other regions across the globe, and is currently enjoying significant growth in terms of assets under management, having already grown by $150bn in 2013 so far. Although much of this growth can be accounted for by the solid performance of hedge funds in 2013 year to date, we have also witnessed some significant commitments to US-based hedge funds so far this year. US-based hedge funds account for an overwhelming 73% of total hedge fund industry assets under management.
Research in this month’s edition of Preqin’s Infrastructure Spotlight reveals that institutional investors, such as public and private sector pension funds, have an overwhelmingly positive outlook towards infrastructure, with 63% planning to invest more capital in the asset class in the next 12 months than they did in the last 12 months. This demonstrates a potential for huge growth in the capital committed to infrastructure development by institutional investors; infrastructure funds closed in 2013 so far have already raised an aggregate $17bn in capital commitments from investors, a 55% increase compared to the $11bn that was raised by funds closed in the same period last year.
New research published in the 2013 Preqin Private Equity Fund Terms Advisor reveals that pressure in the current private equity fundraising market has led to favourable changes in the carried interest structure and transaction fee rebates for limited partners, as private equity funds attempt to draw commitments to their funds.
New research in Preqin Special Report: Asia-Pacific Hedge Funds, September 2013 reveals that Asia-Pacific-focused hedge funds posted net returns of 18.61% over the 12 months since July 2013, compared to the 15.38% and 11.97% achieved by North America- and Europe-focused funds.
New research featured in Preqin Special Report: Real Estate Debt, September 2013, reveals that institutional investor appetite for real estate debt investments has grown dramatically over the last two years, from 8% of investors targeting the strategy in December 2011 to 23% in August 2013. In addition, 62% of real estate investors with a preference for debt investments are below their target allocation to real estate, demonstrating the potential for further growth in the future.
Hedge funds that charge performance fees of more than 20% have produced the highest net returns in four out of the past six years. Funds with at least a three-year track record that have posted positive returns each month since inception charge an average performance fee of 19.50%. Funds with positive performance in less than a quarter of the months studied charge an average performance fee of 16.67%.
Despite demonstrating concerns surrounding recent regulatory changes, the vast majority of alternative asset investors interviewed by Preqin do not anticipate making any changes to their alternative asset allocations based on new regulations. In fact, over 80% of investors interviewed in each asset class expect to commit the same or more capital to their respective asset class in the next 12 months compared to the last 12 months. This strong investor confidence in the industry is encouraging news for alternative asset fund managers looking to raise capital for their vehicles and for the sector as a whole.
Preqin data reveals that hedge funds recovered from negative performance in June, with encouraging July performance across almost all benchmarks. July returns of 1.64% represent the best month for hedge funds since January and strong returns have wiped out the losses incurred in June, taking year-to-date returns to 5.39%.
Most single-manager strategy benchmarks produced positive returns in July, with event driven and long/short funds leading the way with returns of 2.06% and 2.05% respectively. North America was the best performing region during the month, posting returns of 2.73%.
Preqin data shows a record number of private real estate funds focusing on Latin America are currently in market, targeting an aggregate $3.8bn in investor commitments, as fund managers increasingly see more opportunities in the region.
Investor appetite for the region is also strong, with 2012 a record year for Latin America-focused private real estate fundraising. Eight funds reached a final close in 2012 having secured an aggregate $3.4bn in investor capital.
Drawing on data compiled for Preqin’s forthcoming 2013 Preqin Private Equity Performance Monitor, Preqin’s newly launched 2013 Preqin Consistent Performers in Private Report highlights which private equity managers have most consistently out-performed their peers. The league tables do not seek in any way to endorse these fund managers, but rather to illustrate those that have performed the most consistently in the past.
Preqin data reveals that hedge funds suffered disappointing returns in June, with all strategies posting negative returns for the first time in over 12 months. Long/short funds endured the biggest loss in June at -1.66%, followed by macro strategies at -1.51%. Overall returns for the whole of the quarter were poor, with single-manager hedge funds posting returns of 0.14%, compared to 3.29% in Q1 2013.
Preqin’s recent survey of 220 hedge fund managers around the world reveals that there is still uncertainty surrounding the Alternative Investment Fund Managers Directive (AIFMD) among many managers, with 40% of managers that will be impacted by the AIFMD waiting for finalizations of regulations and further advice from their local regulators before taking action.
Preqin's July edition of Infrastructure Spotlight reveals that the top 10 infrastructure fund managers by capital raised in the last 10 years have accounted for a significant 45% of capital raised by closed-end infrastructure funds in the last 10 years.
Of the $231bn raised by closed-end infrastructure funds in the last decade, $103bn is accounted for by the 10 largest fund managers. However, only 17% of the aggregate capital sought by the funds currently in market is accounted for by the top 10 GPs, perhaps indicating that the industry is becoming more diverse as more firms enter the asset class.
Preqin, the alternative asset industry’s leading source of data and intelligence, is delighted to announce the appointment of George Siguler as a Non-Executive Director. He joins the Board with effect from July 9, 2013.
Preqin Special Report: UCITS Hedge Funds reveals that the number of UCITS hedge funds has grown by 260% since 2008. UCITS hedge funds increasingly appeal to institutional investors due to their regulated, transparent and liquid format. Although the vast majority (86%) of institutional investors in UCITS-compliant hedge funds are based in Europe, North America and Asia-Pacific are home to 8% and 5% of UCITS investors respectively.
The $14.5bn raised by unlisted infrastructure funds in H1 2013 represents a significant 77% increase on the $8.2bn raised in H1 2012. The six funds that closed in Q2 2013 contributed 40%, or $5.9bn, to the aggregate capital raised in H1 2013.
Thirty-three closed-end private real estate fundsheld final closes in Q2 2013, raising an aggregate $17.3bn, a 188% increase on the $6.0bn raised in Q1 2013. Preqin anticipates the latest quarterly figures improving slightly (10-20%) as more information becomes available.
There were 324 private equity-backed buyout exits in Q2 2013 valued at an aggregate $92bn, an increase from the $50bn in Q1 2013 and second only to Q2 2011 when 364 exits were valued at a total of $128bn.However, private equity-backed deal flow was down in the second quarter, with 606 deals announced globally totaling $62bn, compared to 678 deals in Q1 2013 valued at $86bn.
Private equity funds closed in Q2 2013 secured an aggregate $122bn, the highest value since $171bn was raised by funds closed in Q4 2008. This is expected to increase by 10-20% as more information becomes available. However, only 154 funds held a final close, the lowest number in any previous quarter.The average size of private equity funds closed in Q2 2013 was $800mn, more than in any previous quarter. This was a result of several large fund closings and a lower number of private equity funds reaching a final close during Q2 2013.
Preqin’s venture capital deal flow data shows that there were 1,315 venture capital financings announced globally in Q2 2013, valued at a total of $10.4bn. This is a similar number of deals to Q1 2013, but the aggregate value of these deals represents a recovery to Q4 2012 levels and is 14% more than the $9.1bn raised in Q1 2013.
Event driven hedge funds have outperformed other strategies in May 2013, posting net returns of 2.10%, Preqin’s June edition of Hedge Fund Spotlight reveals. This takes the overall 2013 performance of event driven funds above that of long/short funds, which have posted returns of 5.39% in 2013 YTD and 0.75% in May.
Preqin’s latest edition of Infrastructure Spotlight reveals that South America-based fund managers active in the region raised 67% of capital garnered by South America-focused funds in 2010-2013, an increase of 28 percentage points compared to the proportion of aggregate capital that was accounted for by domestic fund managers in 2006-2009. As a consequence, fund managers based outside of South America have declined in prominence in the region, having raised only 31% ($1.3bn) of capital for funds targeting the region in 2010-2013, compared to 61% ($2.5bn) in 2006-2009.
Preqin data shown in this month’s Private Equity Spotlight indicates that there are approximately 1,200 private equity funds that can be described as zombie funds. In a zombie fund, the GP is sitting on their assets past their expected holding period with no intention of making realizations and no plans to raise a successor fund, while continuing to collect management fees from their investors. Preqin identifies zombie funds by examining active firms managing a fund with a 2001-2006 vintage that have not raised a follow-on fund after 2006.
The proportion of investors that have exposure to private debt is set to increase as more investors consider committing to private debt in the future. 18% of the private equity investors that Preqin recently spoke to, that do not currently invest in private debt, will consider gaining exposure to private debt in the near future, demonstrating the growing appetite for these funds.
Preqin’s May edition of Hedge Fund Spotlight reveals over half of industry capital is managed by the top 100 hedge fund managers, ranked by assets under management (AUM). These 100 largest hedge fund managers have combined assets under management of $1.4tn and a mean year of establishment of 1994, compared to 2002 for all other hedge fund managers.
The 2013 Preqin Investor Network Global Alternatives Report, published to help investors navigate alternative asset markets, demonstrates that investors remain committed to their allocations to private equity, hedge funds, real estate and infrastructure. Furthermore, a significant proportion of investors recently surveyed by Preqin indicate they proactively source alternative asset fund investments, and do so using dedicated investment employees, indicating they are becoming increasingly interested in managing and developing their alternative assets portfolios.
The aggregate target capital of Europe-focused real estate debt funds currently in market is more than four times the amount of capital being targeted a year ago. There are currently 19 Europe-focused debt funds in market, targeting aggregate commitments of €10.0bn, compared with seven funds with an aggregate target of €2.3bn which were on the road in May 2012. Debt funds account for 26% of the €38.2bn that is being targeted by the 117 Europe-focused funds in market.
Preqin’s May edition of Private Equity Spotlight reveals that just 12% of funds closed in 2012 secured over 75% of their target capital by the time they reached a first close, compared to 33% of funds that held a final close in 2006. In addition, private equity funds closed in 2012 took an average of eight months to reach a first close, compared to five months for funds that closed in 2006.
Preqin’s data reveals that the average holding period for private equity-backed portfolio companies reached 5 years for deals exited in 2012, compared to 3.8 years in 2008. With exit conditions remaining difficult, many fund managers have struggled to make a profitable exit from their investments and, as a result, are holding portfolio companies for a longer period of time.
Preqin announces the expansion of Preqin Investor Network, a free tool for investors looking to source new investment opportunities. The addition of extensive hedge fund data to Preqin Investor Network, which already covers key information on private equity, real estate and infrastructure, makes the platform a vital tool for driving increased transparency in the alternative assets industry, benefiting both investors and fund managers.
Long/short hedge funds are the top performing strategy in the first quarter of 2013, with cumulative net returns of 4.43%, Preqin’s April edition of Hedge Fund Spotlight reveals. Long/short equity is also the most commonly sought-after single strategy by institutional investors, with 43% of investors that are planning on making new allocations to hedge funds in the next 12 months favouring this strategy.
The significant $9.7bn raised by private equity natural resources funds that closed in Q1 2013 already exceeds the aggregate amount of capital raised by natural resources funds closed in the whole of 2011, when $6.8bn was raised.
Preqin’s data reveals that 129 private equity funds held a final close in Q1 2013, having raised an aggregate $67bn. First-time fund managers raised only 6% of the total capital raised by funds that closed in the quarter, compared to a peak of 20% in Q4 2010.
There were 665 private equity-backed buyout deals announced globally in Q1 2013, valued at a total of $87bn, a 112% increase from the $41bn in the same quarter last year. However, the number of deals fell from 770 in Q4 2012 to 665 in the first quarter of 2013.
Preqin’s quarterly venture capital deal-flow data shows that venture capital deal flow continued a slide that began in Q2 2012, with the aggregate value of deals in the quarter reaching a low of $8.5bn from 1,206 venture capital financings, the lowest quarterly value since the $8.1bn seen in Q3 2010.
Twenty closed-end private real estate funds held final closes in Q1 2013, raising an aggregate $5.2bn, a 79% decrease on the $25bn raised in Q4 2012. Preqin anticipates the latest quarterly figures improving slightly (10-20%) as more information becomes available.
A notable $6.7bn was raised by the seven unlisted infrastructure funds that held a final close in Q1 2013. Aside from the $13.5bn raised in Q4 2012, which mainly resulted from the sizeable $8.25bn final close of Global Infrastructure Partners II, this represents the largest quarterly amount secured by infrastructure funds since Q4 2011.
Preqin's latest Hedge Fund Spotlight reveals that hedge funds focusing on the Asia-Pacific region posted significant returns in January and February 2013, posting 3.97% and 2.18% in each month respectively. This is in comparison to North American and European hedge funds, which posted only 0.61% and 1.24% in February respectively.
Preqin’s Special Report: Private Equity Secondary Market reveals that 53% of investors interviewed by Preqin in March 2013 believe the secondary market is of core or growing importance within their private equity portfolios, suggesting the secondary market has the potential to grow further in the future.
The proportional representation of women in high-level roles is highest at Asia-based private equity firms, with an average of 12.8% of senior roles held by women at firms based in this region as of February 2013. This is higher than in North America- and Europe-based private equity firms, where the average is 10.3% and 9.9% respectively.
Preqin Special Report: Latin America reveals that 28% of investors with existing exposure to or an interest in investing in Latin America will be increasing their private equity allocations to the region over the next 12 months, and 61% will be maintaining their current allocations in 2013.
Recent months have seen renewed investor interest in higher risk-return strategies, such as value added private real estate funds. According to the latest information released in Preqin’s March edition of Real Estate Spotlight, value added vehicles are the most sought after fund type by investors in private real estate in 2013, with 55% of private real estate investors targeting this strategy in 2013, compared to 47% in 2012.
2013 has seen continuing positive performance for funds of hedge funds, with vehicles generating returns of 2.10% in January 2013, according to the latest information released in Preqin’s February edition of Hedge Fund Spotlight. In 2012, funds of hedge funds generated returns of 4.63%, with those in the top performance quartile posting net returns in excess of 7%, and the most successful vehicle making gains of more than 24%.
Preqin’s latest survey of more than 100 investors in private equity funds has revealed an increase in appetite for large to mega buyout vehicles, with 23% of investors targeting this fund type in 2013, compared to 9% in 2012. However, small to mid-market buyout funds continue to be viewed by a significant proportion of investors as presenting the best investment opportunities, with 51% of respondents stating that they will be seeking to commit to this fund type in 2013.
The opening weeks of 2013 saw the two largest private equity-backed public-to-private transactions announced since the buyout boom period of 2006-2007, indicating a potential return of the mega buyout: the $24.4bn Silver Lake-backed privatization of Dell Inc. and the $28bn Berkshire Hathaway and 3G Capital-backed buyout of H.J. Heinz Company.
Preqin’s latest survey of more than 100 investors in private real estate funds has revealed an increase in appetite for the asset class, with 53% of respondents expecting to make commitments to private real estate funds in 2013. In a similar study carried out a year ago just 36% of respondents expected to make investments in the following 12 months.
Forty-two percent of hedge fund managers interviewed by Preqin in December 2012 for the 2013 Preqin Global Hedge Fund Report had a negative outlook concerning regulations in 2013, citing concerns about the extra compliance burden leading to greater costs and complexity within their operations. However, nearly half (49%) of investors interviewed stated that they believe the regulations coming into effect will be positive for the hedge fund industry, citing benefits including increased transparency and oversight of hedge funds; many investors also feel that further regulations will improve the pool of managers to choose from when investing in hedge funds.
North American deal flow reached a post-Lehman high in 2012, Preqin data reveals. This contributed to strong global deal flow recorded in 2012, with 2,866 buyout deals announced valued at $254.6bn. This nears the global post-2008 highs of 2011, which witnessed $264.8bn globally from 2,900 buyout deals; compared to 2010, global deal flow in 2012 represents a 14% increase in the number and a 15% rise in the value of buyout deals.
In Q4 2012, 1,216 venture capital financings were announced, with an aggregate value of $8.9bn – a 6% drop in the number and 5% decline in the value of deals in comparison to Q3 2012, and a 13% and 23% decline in number and value from Q2 2012. Between 2011 and 2012 the aggregate value of deals announced dropped by 22%, from an aggregate value of $50bn in 2011 to $39.1bn in 2012.
A significant $11.9bn was raised by the eight unlisted infrastructure funds that held a final close in Q4 2012, the largest quarterly amount raised by closed funds since the $17.4bn secured by infrastructure funds that closed in Q4 2008. New York-based Global Infrastructure Partners held an $8.25bn final close for its second vehicle during the quarter, the largest unlisted infrastructure fund ever raised.
Twenty-eight closed-end real estate funds held final closes in Q4 2012, raising an aggregate $22.6bn; this is a significant increase on the $10.7bn raised in Q3 2012. Much of this increase can be attributed to the final close of the $13.3bn Blackstone Real Estate Partners VII during the quarter.
Preqin’s latest data shows that the funds that closed in the final quarter of the year raised a similar amount to those closed in the previous quarter ($74.6bn in Q4 2012 compared to $75.0bn in Q3 2012). However, we expect the Q4 figure to increase by around 10-20% and exceed the Q3 total as further information becomes available.
Many investors which target more liquid hedge fund investments may be sacrificing greater returns in the process, Preqin’s liquidity study in this month’s Hedge Fund Spotlight reveals. Long/short funds with quarterly redemptions generated a cumulative return of 58% since 2007, whereas daily redemption and weekly redemption long/short funds, which allow investors more frequent access to their capital, posted cumulative returns of 28% and 36% respectively over the same time period.
Preqin, the leading provider of data and intelligence to the alternative assets industry, is pleased to announce the opening of its new office in Silicon Valley, California. This additional West Coast presence complements existing offices in New York, London and Singapore, reinforcing Preqin's position as a comprehensive global data provider on private equity, hedge funds, real estate and infrastructure.
There are now 713 global institutional investors with an active CTA portfolio, a significant increase on 2011, when the number stood at 504, and 2008, when just 331 had CTA funds in their holdings. Preqin has conducted in-depth analysis of the CTA industry using its market leading Hedge Fund Investor Profiles database and newly launched Hedge Fund Analyst product.
Preqin’s initial public offering (IPO) pipeline data reveals that there are currently 42 private equity- and venture capital-backed companies globally set to list in the coming weeks, seeking to raise $8.4bn in public offerings. Twenty-four of these companies are buyout-backed, and a further 18 VC-backed companies have currently filed for an IPO.
Although fundraising conditions remain challenging around the globe, Asia-focused funds on the road are showing considerable momentum, with many having already held interim closes, and the market is welcoming back many large players that have launched new funds, according to the recently released Preqin Special Report: Asian Private Equity.
Preqin’s quarterly venture capital deal-flow data shows that 1,226 venture capital financings were announced during Q3 2012, with an aggregate value of $9.3bn – an 8% drop in the number and a 20% decline in the value of deals in comparison to Q2 2012.
Twenty-six closed-end private real estate funds held final closes in Q3 2012, raising an aggregate $9.0bn. This represents a small increase on the $8.3bn which was raised in Q3, but is lower than the $11.9bn raised in the first quarter of 2012 and the $16.7bn raised in Q4 2011. Preqin anticipates the latest quarterly figures improving slightly (10-20%) as more information becomes available.
The $71.6bn in deals in Q3 2012 represents one of the strongest quarters for private equity-backed deals in the post-Lehman era, surpassed only by the $83.3bn of deals in Q2 2011.
Although just six unlisted infrastructure funds held a final close in Q3 2012, raising $2.7bn in investor capital, a considerable $14bn was raised by those funds holding an interim close during the quarter. The aggregate capital raised by funds holding a final close in Q3 2012 was 48% lower than in Q2, but the capital raised by funds holding an interim close was 33% higher. This shows that infrastructure fund managers continue to attract fresh fund commitments despite fewer vehicles reaching a final close at present.
Although the aggregate capital raised by private equity funds reaching a final close in Q3 2012 fell significantly from the previous quarter, this level of capital shows a large uptick in private equity activity compared to same quarter in 2011. We also expect Q3 2012 fundraising figures to increase by 10-20% as more information becomes available.
Preqin research indicates that buyout funds are still carrying many portfolio companies purchased during the recordbreaking ‘buyout boom’ period of 2006-2007, with just 28% of deals made in 2006, and 19% of those made in 2007, having been fully exited by general partners (GPs).
Preqin’s latest survey of over 100 private real estate investors reveals an increase in the proportion of investors planning to commit to the asset class in the next 12 months, compared to the 36% that planned to invest in the 12 months following January 2012.
Forty-four percent of investors expect to next commit capital to private equity before the end of 2012, the latest Preqin Investor Outlook: Private Equity reveals. Despite uncertainty in the wider financial markets, private equity investors remain positive, with 90% expecting to maintain or increase their allocations to the asset class in the longer term.
Research conducted by Preqin for the 2012 Private Equity Performance Monitor publication shows that the total assets under management held by private equity funds worldwide has reached $3tn for the first time, highlighting the sustained growth of the industry in spite of challenging wider economic conditions.
There were 705 private equity-backed buyout deals in Q2 2012, valued at an aggregate $60.4bn – a 37% increase in deal value from Q1 2012, and a 6% increase from the $56.8bn in Q4 2011
Twenty-seven closed-end private real estate funds reached a final close in Q1 2012, having raised an aggregate $7.5bn. A further three real estate funds of funds closed in the quarter, having raised an aggregate $1.3bn. Although Preqin anticipates the latest quarterly figures improving slightly (10-20%) as more information becomes available, it is clear that fundraising in Q2 2012 has been slower than the levels seen each quarter in 2011 and in the first quarter of 2012.
Preqin’s deal flow data shows that there were 1,249 venture capital financings announced during Q2 2012, representing an aggregate value of $10.9bn. This is a 16% increase in both the number and value of VC deals in comparison to Q1 2012, and is the largest amount of aggregate capital committed by VC firms since Q3 2011.
Despite fewer infrastructure funds reaching a final close in Q2 2012 compared to the previous quarter, the number of funds holding an interim close shows that fund managers are still attracting fresh institutional capital.
While the aggregate capital raised by private equity funds reaching a final close in Q2 2012 was similar to the Q1 total, the number of funds that have reached an interim close increased in Q2 from the previous quarter.
The majority of buyout funds with a 2011 or 2012 vintage, or those yet to begin investing as of June 2012, will rebate the entirety of any transaction fees they earn from portfolio companies back to the LPs in their funds, new research conducted for the 2012 Preqin Private Equity Fund Terms Advisor shows.
North American-based endowments remain dedicated to private equity investment, with the vast majority increasing or maintaining exposure and over half expected to make their next commitment before the end of the year.
There is a high degree of correlation – 0.94 – between LPX50, an index of the 50 largest and most liquid listed private equity (LPE) stocks globally, and traditional private equity limited partnerships, as measured by Preqin’s Private Equity Quarterly Index (PrEQIn). This means that LPE can provide investors with access and exposure to similar assets with a similar risk-return profile to traditional limited partnership private equity. This is fundamentally important as it means investors can incorporate a listed element within their private equity portfolios and it opens up new opportunities for investment in the asset class.
Almost two-thirds of insurance companies are planning to make new private equity investments before the end of 2012, the latest Preqin research reveals. The results of the most recent Preqin Special Report show that despite the impending Solvency II regulatory changes, the vast majority (79%) of insurance companies have not altered their levels of exposure to private equity.
Fifty-nine percent of capital raised for emerging market private real estate investments last year was committed to fund managers headquartered outside established markets, such as North America and Europe. This represents a significant increase from 2005, which saw just 18% of capital raised for emerging markets going to local GPs, but a decrease from 2010, when a record 77% of capital was committed to emerging market-based managers.
Legislation, such as Basel III and the Volcker Rule, part of the Dodd-Frank Act in the US, coupled with liquidity concerns and a fall in client appetite, has resulted in a decline in banks’ involvement in the private equity asset class, a Preqin study reveals. However, the majority do not anticipate recent regulation impacting on their private equity allocations.
An increase in venture capital deal flow occurred in 2011 in comparison to the previous year, but looks to have slowed down in 2012, Preqin research shows. Data collected for the newly launched Venture Deals Analyst reveals that deals across the investment stage spectrum attracted more capital in 2011 in comparison to the previous year, but the value of deals completed in Q1 2012 represents a fall from the previous quarter, despite the number of announced financings increasing, an indication of smaller financing sizes during the quarter.
Over half of investors participating in a recent Preqin study invest in at least two new hedge funds each year. Twenty-seven percent will commit to between four and five new funds, on average, in a 12-month period. Institutional investors are also long-term sources of hedge fund capital, with more than one-fifth stating that they will keep capital invested in a hedge fund for over five years should the vehicle perform as expected.
The new Preqin Asian Private Equity Benchmark – the first ever benchmark information made available to the private equity industry on Asian private equity funds – demonstrates how private equity in the region has outperformed the MSCI Pacific and MSCI EMF indices over the one-, three- and five-year periods.
Private equity returns have fared better than their listed counterparts both before and since the onset of the financial crisis, according to analysis carried out by Preqin. The PrEQIn Index, available through the Preqin Investor Network, the free dedicated platform for private equity investors, shows that returns from private equity investments fell by less than those from listed investments in the immediate aftermath of the crisis, and have since recovered more quickly.
Total sovereign wealth fund assets under management stand at $4.62tn, an increase from $3.98tn in 2011, Preqin data reveals. Data analyzed for the forthcoming 2012 Preqin Sovereign Wealth Fund Review also show that more than half of all sovereign wealth funds, 57%, invest in private equity.
Private equity-backed buyout value is at its lowest level for two years, but deal volume remains strong.
Five infrastructure funds reached a final close in Q1 2012 with $2.6bn in commitments; 10 infrastructure funds held interim closes. Q1 2012 unlisted infrastructure fundraising figures are down on the previous quarter, when 10 funds reached a final close securing an aggregate $8.4bn in investor commitments. However, 10 funds held an interim close in Q1, proving that infrastructure fund managers continue to attract fresh capital from investors.
Twenty-six closed-end private real estate funds reached a final close in Q1 2012, raising an aggregate $9.5bn. This represents a decline on the $15.8bn raised by 39 funds in Q4 2011; however Preqin anticipates that the latest quarterly figures improving slightly (10-20%) as more information becomes available, suggesting fundraising in Q1 2012 may ultimately be close to the levels seen in first three quarters of 2011.
Private equity fundraising in Q1 2012 was comparable with recent quarters, Preqin data reveals. 116 funds closed raising a combined $50.6bn. The figure is expected to rise by up to 20% as more information becomes available.
The PrEQIn Distressed Private Equity Index stands at 322.1 as of September 2011 (rebased to 100 as of 31st December 2000), making distressed PE the best performing strategy over that time period.
Nearly all of the top 100 investors in infrastructure, by committed capital, gain access to the asset class through unlisted funds the latest Preqin research reveals. While a significant proportion also pursue direct investments, less than a quarter seek exposure through listed funds.
65% of private equity investors with an interest in co-investing anticipate increasing allocations to this area in the future. More than half perceive returns to be better than from regular PE fund investments. Just 9% of LPs that currently express interest in co-investments expect to reduce their allocations to these investments in the future, a Preqin study reveals.
A look at the proportion of women employed in senior private equity roles around the world.
A record number of add-on deals were completed in 2011 and the upward turn in transactions of this type is continuing into 2012, Preqin data reveals.
Almost two-thirds of investors are planning to make new private equity investments in the first half of 2012, the latest Preqin research reveals.
The AUM of mid-sized fund of hedge funds managers increased by an average 10% in 2011, Preqin research reveals.
Private real estate fundraising fell 23% between Q3 and Q4 2011. Just $9.4bn was raised by the 23 funds that reached a final close in the last few months of the year.
The number and value of private equity exits and deals fell between Q3 2011 and Q4, although both deal and exit flow finished the year at a higher level than in 2010.
Private equity fundraising floundered in the second half of 2011 and the funds that closed in the fourth quarter only raised a similar amount to those that closed in the third quarter.
Half of the annual infrastructure fundraising total was raised in the final quarter of the year, Preqin data reveals.
Q4 2011 exit activity to date is below the level achieved in Q3 2011, suggesting that private equity-backed exit flow is back in recession following a fleeting, record-breaking renaissance in the first half of the year. According to Preqin data, 170 exits have been completed so far this quarter with a total value of $28.4bn, the lowest quarterly total since Q1 2010.
While many European and North American investors are shying away from making commitments to emerging hedge funds, an increasing number of Asia-based institutions are actively pursuing opportunities to invest in these types of fund.
Growth funds investing during the crisis period have produced median returns of over 7%, data from the recently launched Preqin Growth Benchmarks reveals.
With a record number of funds on the road, and a smaller proportion of investors keen to make new commitments, conditions are set to remain tough for real estate managers, Preqin research suggests.
Twenty-three percent of investors believe private equity has become more attractive in light of recent volatility in financial markets. A further 64% of investors do not view private equity any differently as a result of the current financial climate and 14% find it less attractive, Preqin research has found.
The surge in secondary buyouts is likely to continue apace, with 48% of GPs expecting the number of such transactions to increase going forward, the latest Preqin research reveals.
Hedge fund managers will be able to access new capital sources over the next 12 months as 80% of investors are at least considering investing with new managers, the latest Preqin research reveals. Only 20% of hedge fund investors plan to focus solely on maintaining existing relationships with managers over the next 12 months.
The proportion of private real estate funds closing on target has increased over two-fold since 2009, the latest Preqin study shows.
There has been a notable increase in the mean and median percentage transaction fees across all private equity deal sizes since the recovery began, a joint investigation by Preqin and Dechert LLP has revealed.
Preqin, the alternative assets industry’s leading source of data and intelligence, is pleased to announce that Anthony Habgood has joined the company’s board of directors as Chairman.
GPs that closed their funds in 2008 still have a combined $204 billion in dry powder to invest from these vehicles, the latest Preqin research reveals. As the average private equity fund investment period is five years (real estate funds are the exception), these GPs will be under a considerable amount of pressure to invest both to avoid exercising clauses to extend the agreed investment period and to provide timely returns on capital.
Just 11% of institutional hedge fund investors have stated that returns on their investments have exceeded expectations in the past 12 months, the latest Preqin study shows. The proportion of investors that believe returns have exceeded, or been in line with, expectations has fallen by 11 percentage points to 60% since 2010. This is the lowest proportion in the past four years.
17 private equity real estate funds reached a final close in Q3 2011, raising an aggregate $11.0bn. This is a 16% decline on the $13.1bn which was raised by 27 funds in Q2 2011; however, Preqin anticipates the latest quarterly figures improving slightly (10-20%) as more information becomes available, which suggests fundraising in Q3 could end up close to the level seen in the previous quarter.
Q3 2011 unlisted infrastructure fundraising figures are down on the previous quarter: this quarter, two infrastructure funds reached a final close, raising an aggregate $1.6bn, compared to the seven funds that reached a final close in Q2, having raised an aggregate $2.9bn. However, a further 11 infrastructure funds held an interim close in Q3, demonstrating that managers have been able to attract fresh capital from investors.
During Q3 2011, 97 private equity funds reached a final close, raising an aggregate $44.8bn, significantly less than the $82.8bn that was raised by 175 funds that closed in Q2 2011. In addition to the 97 funds that reached a final close in the quarter, however, a further 109 funds held interim closes, securing commitments totaling $42.7bn towards their fundraising targets.
Preqin’s quarterly deals data shows 674 private equity-backed buyouts deals worth an aggregate $60.6bn were announced in Q3 2011, a 23% decrease in value from the previous quarter’s total of $78.7bn. 254 exits valued at an aggregate $56.2bn were announced in Q3 2011, 54% down from the record total of over $120bn in Q2 2011.
Increased investor caution has led to a decline in the proportion of investors that are prepared to invest with managers raising their first real estate fund, the latest Preqin study shows. 26% of investors would commit to first-time funds, while 15% will consider doing so; this is a decline of eight and one percentage points respectively since 2010.
Infrastructure investment advisors view the emerging markets of Asia and Latin America favourably, citing both regions as sources of attractive investment opportunities in the forthcoming year, the latest Preqin research shows. Europe is likely to remain the centre of investment activity, while North America is likely to attract an increased level of capital commitments.
Private equity buyout deal flow has increased over the past year, but it is very much a seller’s market, Preqin and LexisNexis Enterprise Solutions have found. A joint study of global private equity buyout firms has revealed that while 49% feel that the number of opportunities has increased over the past 12 months, 68% feel that these opportunities are overpriced.
Private equity fund managers looking to raise their first funds have reason to be optimistic, the latest Preqin research shows. Over 50% of investors have stated that they will at least consider investing in a first-time or spin-off fund, while performance data suggests that these funds have generated good returns for investors in the past.
75% of investors are looking for greater liquidity in their hedge fund investments following the financial crisis, the latest Preqin study reveals. Funds with lock-up periods are now considered less favourable amongst investors as they seek the flexibility to exit their investments at their own discretion.
A Preqin investigation into real estate calls-ups and distributions suggests there are signs of life in the private equity real estate market. Investors receiving distributions could re-invest this capital in new real estate funds in the near future, relieving some of the difficulties in the stagnant fundraising market.
Research conducted for The 2011 Preqin Infrastructure Review has revealed that just under two-thirds of infrastructure funds charge management fees of 2% on funds that are currently raising or that have closed in the recent past. This is despite pressure for lower fees from investors: 62% believe that management fees are too high.
Many banks are changing their private equity investment strategies as a result of new legislation, the latest Preqin research reveals. The private equity arms of many global banks are being restructured, or spun out, as they seek to comply with the Volcker Rule in the US and European legislation Basel III.
Private equity fund fees remain a bone of contention for half of investors, although they are willing to pay for managers with a strong performance history.
Infrastructure capital raised during Q2 2011 was marginally higher than in Q1, and 15 funds held an interim close during the quarter suggesting good momentum in the market.
The latest Preqin hedge fund investor study has revealed that just under one-third of investors plan to make a commitment to the asset class in the coming 12 months, investing up to a combined $195bn.
There are encouraging signs of momentum in the PE fundraising market as aggregate total raised during Q2 2011 reached $66 billion, up from $61.6 billion in Q1 2011.
18 funds reached a final close in Q2 2011, raising an aggregate $11.2 billion. This is an increase on the $8.9 billion which was raised in Q1 2011 and the $7.1 billion raised in Q4 2010. Fundraising does remain challenging, and is still well below the levels seen in 2006-2007.
Preqin’s quarterly deal-flow data shows 309 PE-backed exits valued at $120.1bn occurred in Q2 2011, surpassing the previous record of $81.5bn in exits in Q4 2010; 674 PE deals worth $75.6bn were announced in Q2 2011, an increase of 33% from the value of deals in the previous quarter.
Investment consultants have ranked opportunistic funds as the most attractive of all real estate strategies in the current market, the latest Preqin study reveals.
The top 10 private real estate firms, based on funds raised in the past 10 years, hold just under a quarter of the industry dry powder. A Preqin study of these firms reveals the extent to which they dominate the sector.
An increasing proportion of private equity cash is being assigned to Asia by the 10 largest global PE firms. 23% of deals completed by the firms in 2011 to date have involved assets in the region, compared to 5% in 2007.
Preqin data shows that PE-backed exit value in Q2 2011 to date has already surpassed the record level reached in Q4 2010. 201 PE-backed exits valued at $85bn have been completed so far this quarter, taking exit value 5% above the record $81.3bn reached in Q4 2010.
Only 7% of institutional investors in hedge funds have no plans to increase their allocations to hedge funds over the next couple of years, the latest Preqin study shows.
Europe is recognised as the hub of the infrastructure industry and there are currently 47 funds in market targeting investment in the region. The UK are leading the way in infrastructre investment, with just under 50% of all Europe-focused funds being managed by firms based in the region.
Preqin's latest research shows that only 40% of $1bn+ funds are producing returns exceeding the median compared to 54% of those which raised $500mn or less.
The latest Preqin research shows that there has been a significant decline in the number of hedge fund of funds managers with AUM of between $2 and 5bn, while those with less than $250mn in assets now account for a larger proportion of managers in the industry.
A project undertaken by Preqin in association with AVCAL reveals that Australian investors are still interested in private equity and venture capital investments, but are taking a cautious approach to investment.
17 private equity real estate funds reached a final close in Q1 2011 having raised an aggregate $5.8 billion. This represents a small decrease on the $6.5 billion raised in Q4 2010. Fundraising for the asset class remains far slower than the industry saw in 2006-2008, when quarterly totals were typically in excess of $30 billion.
Preqin’s quarterly deal flow data shows Q1 2011 exit activity matched record levels set in Q4 2010, while the number and value of new deals fell; 623 PE-backed deals worth $49.9bn were announced, a decrease of 8% in number and 26% in aggregate value from Q4 2010.
Two unlisted infrastructure funds reached a final close in Q1 2011 raising an aggregate $0.6bn; the lowest quarterly total since Q2 2004. However, infrastructure fund managers were still able to attract capital, with eight funds holding an interim close during the quarter raising a further $2.2bn, equaling the total capital raised by funds holding a final close in Q4 2010. One infrastructure-focused fund of funds also reached a final close having raised $500mn. A total of 30 deals were completed in the period.
Q1 2011 was another disappointing quarter for private equity fundraising, although a number of significant first closes during the period do point to likely increases in final close volume as 2011 progresses.
Cleantech and renewable energy focused infrastructure funds have been growing in importance in recent years, with European focused activity taking the largest share of the global market.
Our latest press release and research report shows the development in this area, and highlights the potential for significant growth with 64 new funds focusing on this area currently seeking $44.2bn worldwide.
AB-1743 introduces new regulations for fund marketing professionals seeking to interact with certain California public pension plans including CalPERS and CalSTRS.
In order to measure the effect of the regulations, Preqin undertook a survey of placement agents, their views on the various demands, and whether they would continue to market funds to affected pension plans.
Our latest analysis of public pension plans shows a significant increase in both the number of public pension plans allocating to hedge funds and also a rise in average allocation amongst those committing.
Following extensive research, the 2011 Preqin Sovereign Wealth Fund Review is now complete. This year's publication shows that total assets are now standing at $4tn, with allocations to alternatives rising across the board.
By analyzing the quartile rankings of funds between their fourth and sixth year and maturity, we show just how important relative performance is for funds early on in their life-cycle. The study is important for all fund managers, investors and advisors as it shows that an assessment of early fund performance is relevant and should form a significant role in the due diligence process.
Preqin research reveals a boom in the unlisted infrastructure market in India.
Press release showing that activity in the IPO market is hotting up for private equity players, with aggregate IPO volumes in 2011 hitting $10bn by only February.
In the latest Preqin study, hedge fund managers revealed that they are altering their fees, risk adjustment procedures and strategicofferings to attract institutional investors to their hedge funds.
Preqin Investor Outlook: Real Estate reveals market conditions, property prices and recent poor fund performance is leaving investors reluctant to commit to funds in 2011.
Aggregate $35.8 billion raised in 2010, a 28% decline on private equity real estate fundraising in 2009.
Aggregate $27.7bn raised, eclipsing 2009 total of $7.7bn. 25 funds closed, suggesting recovery well under way.
265 exits worth $71.8bn occurred in Q4 2010; 593 new private equity deals worth $64.2bn announced. 2,171 buyout deals worth $204.9bn announced in all 2010 – over double total value of 2009 deals.
Just $225bn raised globally in 2010; lowest annual total since 2004. Just $32bn raised in Q4 2010 – lowest total since Q3 2003.
Interviews conducted by Preqin with over 100 leading investors in private equity funds reveal that demands on private equity portfolios are now higher than ever before relative to public markets.
A Preqin survey of over 100 alternative assets fund managers and investors found that just under a third support the AIFM Directive to some extent, with firms in certain countries where the new legislation will replace more restrictive existing rules believing that it will serve to improve conditions.
The latest Preqin survey shows that the number of hedge fund investors expressing an interest in seed investments has almost doubled, from 11% in 2009 to 21% in 2010.
Research conducted reveals that the performance of Asia and Rest of World-focused private equity real estate funds has been excellent, with close to half of all the funds that Preqin holds data for that focus on this area (53) appearing in the top 25% of all funds worldwide for their respective vintage years.
The latest Preqin private equity compensation study, based on a survey of 180 leading private equity firms worldwide, reveals that changes in bonus payouts to employees at private equity firms have been mixed. While base salaries have remained relatively stable, with three-quarters of firms reporting no change or relatively small increases, bonus payouts are where the real divergence has occurred.
Record number of debt funds currently on the road expected to multiply as fund managers seek to capitalize on tight credit market.
Preqin survey of Europe-based insurance companies shows the EU legislation will have a significant impact on both direct and indirect real estate investment.
Preqin’s quarterly deal flow data shows a total of 515 private equity buyout deals announced in Q3 2010, with an aggregate value of $66.7bn. This represents a 29% increase in the aggregate value from Q2 2010, when 498 deals were announced with an aggregate value of $51.9bn.
81 private equity funds worldwide reached a final close in Q3 2010 raising an aggregate $57bn, a small increase from the $49bn raised in Q2 2010.
The $7.3 billion raised by 20 private equity real estate funds in Q2 2010 is the lowest amount of capital raised by the industry since Q3 2004, when 30 funds raised an aggregate $6.1 billion.
A total of $6.7bn was raised worldwide by six funds achieving a final close – the highest level of aggregate capital collected since 2008. This marks the fourth consecutive quarter registering an increase in fundraising from the previous quarter.
Preqin’s quarterly private equity-backed buyout dealflow data for Q2 2010 shows total deal value increasing by 60% from Q1, marking the most active quarter since 2008.
Private equity real estate funds raised $9.8 billion worldwide in the first quarter of 2010, the third successive quarter in which less than $10 billion was raised. While Q1 fundraising did represent a small increase on the $9.4 billion which was raised in Q4 2009, the pace of fundraising remains far slower than it has been in previous years.
Family offices are set to become an increasingly important group of investors to fund managers, particularly as more than two-thirds (69%) will consider forging new relationships with GPs in 2010.
Preqin’s latest report reveals that the aggregate total assets of all sovereign wealth funds (SWFs) has continued to increase over the past year. The recovery in global equities markets helped certain SWFs regain ground lost as a result of the economic downturn.
Results of Preqin’s survey of hedge fund managers and investors reveals considerable interest in managed accounts platforms.
2009 saw only $42bn raised by 103 funds worldwide, making it the worst year for new private equity real estate funds since 2004,when $37bn was raised by 136 funds worldwide. 2009 figures represent a 69% decline compared with 2008, when $133bn wasraised by 225 funds worldwide.
Preqin’s survey reveals investors have more capital available for new private equity investments in the coming year.
First drop in annual deal volume since emergence of unlisted infrastructure asset class as unlisted infrastructure fund managers across the globe completed 130 deals in 2009, the lowest annual total since 2005.
President Obama’s statement calling for banks to be banned from “owning, investing in or sponsoring” private equity and hedge funds could have a very significant impact on the alternatives industry. Preqin has analyzed its industry-leading databases of investor information and fund manager data in order to reveal the contribution that banks and investment banks make to the US private equity industry.
The effects of the changing credit market and global economic downturn on different areas of the buyout industry can now be seen through examining the performance of different sized vehicles since the onset of the financial crisis in the third quarter of 2008.
Private equity fundraising has had its worst year since 2004, with only $246bn raised by 482 funds worldwide. This is 61% down on the $636bn raised in 2008, and 62% down on the record $646bn raised in 2007.
Performance data for the private equity industry as of 31st March 2009 is now in. The results are showing that although privateequity valuations are still in decline, the rate of quarterly change has slowed considerably from 2008, suggesting that the market isbottoming out and that the fund valuations are set to stabilize.
Institutional confidence one year on - have investors recovered from the crash? Results of Preqin hedge fund survey finds hedge fund returns meet or exceed expectations for 73% of institutional investors.
Private equity real estate funds worldwide raised just $4.9 billion in Q3 2009, the lowest fundraising total for a quarter since Q32003, when 17 funds raised $3.2 billion.
Only $38bn raised worldwide in Q3 2009, lowest overall fundraising total since Q4 2003.
Preqin’s latest figures indicate the full toll that the global economic downturn has taken on private equity returns. Overall returns forthe industry are down by -27.6% for one year performance compared to this point one year ago.
Results of Preqin’s Hedge Fees Survey - “2 & 20” Fee Structure being driven Down by Institutional Pressure.
$76.2bn raised in Q2 represents a 28% increase on $59.6bn raised in Q1 2009. However, private equity fundraising remains a challenging prospect.
Preqin has interviewed a total of 568 institutional investors in private equity as to their interest in the secondary market, and their expected timeframe for activity in the market.
Figures for global private equity fundraising show that a total of 768 private equity funds achieved a final close in 2008, raising an aggregate $554bn in commitments.
Preqin has undertaken a survey of investors towards their attitudes to private equity in the wake of the credit crunch.
In 2007 a total of $34.9bn was raised, up from $6.6bn raised in 2005, and 2008 looks set to be another strong year with $13.2bn raised already in the year to date.