The Boston-headquartered firm has $37bn of assets under management in private equity, private debt, and hedge funds.
March 30 (Preqin News) – Global alternative asset manager Summit Partners will likely hit the road with the 12th generation of the Summit Partners Growth Equity Fund in the second quarter of 2023, according to Preqin’s fundraising forward calendar.
The backdrop: The Boston-headquartered firm has $37bn of assets under management in private equity, private debt, and hedge funds.
The fund series started out as a venture capital fund, but moved to focus on later-stage, expansion, and then growth capital deals as fund sizes increased. Summit Partners’ last fund, SPGEF XI, closed on $8.3bn in 2021, raising considerably more than its $7.0bn target. It was also a big step up from SPGEF X, which closed on $4.9bn in 2019. Preqin data shows that the firm has delivered returns above median for all its growth capital funds, with a quarter currently in the top quartile.
In February, Summit Partners announced a first and final close of its Europe Growth Equity IV fund, which closed in just five months at its hard cap of €1.4bn. The fund will make minority and majority investments in growth companies in key industry sectors, including technology, healthcare and life sciences, and growth products and services.
Why it matters: The fund will be a bellwether for market appetite for late-stage venture and growth funds with a technology focus.
Summit Partners is a top performer and classified as a growth capital fund, but its technology focus means there is overlap with late-stage venture capital, which has been the alternative assets strategy most impacted by the economic slowdown and market correction.
The proportion of LPs surveyed for Preqin Investor Outlook: Alternative Assets, H1 2023 who think that growth capital funds will provide the best opportunities in private equity fell from 50% in November 2021 to 32% a year later. Late-stage venture capital saw a similar fall, from 27% in 2021 to 21% last year.
Growth capital fundraising has dropped from a high of $158.8bn across 480 funds in 2021, but has remained stable through 2022, with more than $25bn raised in each quarter and a total of $147.1bn raised throughout the year. Just 40 funds have closed so far in 2023, but they have raised an aggregate $32.8bn. The increase in average fund size from $351mn in 2021 to $579mn in 2022 and $965mn in 2023 year to date bodes well for a large manager such as Summit Partners.
The opinions and facts included within the above do not constitute investment advice. Professional advice should be sought before making any investment or other decisions. Preqin providing the information in this content accepts no liability for any decisions taken in relation to the above.
