Private equity fundraising at highest level since financial crisis

Private equity funds closed in Q2 2013 secured an aggregate $122bn, the highest value since $171bn was raised by funds closed in Q4 2008

Preqin’s data shows an aggregate $122bn was secured by private equity funds reaching a final close in Q2 2013, which is expected to increase by 10-20% as more information becomes available. However, only 154 funds held a final close, the lowest quarterly number in the last 10 years. A further 155 private equity funds held an interim close in Q2 2013 securing an additional $24bn towards their final targets.

The average size of private equity funds closed in Q2 2013 was $800mn, the highest figure in the last 10 years. This was a result of several large fund closings and a lower number of private equity funds reaching a final close during Q2 2013.

Other Key Facts:

- The top 10 private equity funds closed in Q2 2013 secured $67bn, 55% of the total capital raised by the 154 funds closed in the quarter.

- Warburg Pincus’s balanced fund, Warburg Pincus Private Equity XI, was the largest fund to close in the quarter, securing $11.2bn.

- 27 buyout funds held a final close in Q2 2013 securing an aggregate $49bn, more than double the $23bn raised by buyout funds closed in Q1 2013, and the highest figure since $73bn was secured in Q4 2008.

- Silver Lake Partners IV was the largest buyout fund to close in the quarter having secured $10.3bn, followed by Apax VIII which raised €5.8bn.

- 101 North America-focused funds closed in Q2 2013, securing an aggregate $67bn, while 25 Europe-focused funds secured $32bn.

- 13 Asia-focused vehicles closed in the quarter, raising an aggregate $9bn, while 15 vehicles focused outside of North America, Europe and Asia secured $5bn.

- Private equity funds closed in Q2 2013 took an average of 19.2 months to reach a final close, the longest amount of time in the period since 2006.

- 26 first-time funds closed in Q2 2013 securing an aggregate $5bn, down from 39 first-time funds closing in Q1 2013 which secured a collective $7.5bn.

Comment: Ignatius Fogarty – Head of Private Equity Products, Preqin

'Private equity fundraising was very strong in Q2 2013, with the highest quarterly value raised since the onset of the financial crisis in late 2008. The fact that the average size of private equity funds closed in Q2 2013 was $800mn and experienced managers dominated the fundraising environment, shows that investors are increasingly looking to back fund managers with a demonstrable track record. With 1,958 private equity funds on the road, coupled with the average time to reach a final close at its highest level in the period since 2006, fundraising for the second half of 2013 will remain challenging, especially for less experienced or first-time fund managers'.

10 Largest Funds to Hold a Final Close in Q2 2013

Breakdown of Q2 2013 Fundraising by Type and Geography

Breakdown of Funds Closed in Q2 2013 by Primary Geographic Focus

Average Time Taken for Funds to Achieve a Final Close by Year of Fund Close

Fundraising by Type

Twenty-seven buyout funds held a fi nal close in Q2 2013 securing an aggregate $49bn, more than double the $23bn raised by buyout funds closed in Q1 2013. Six natural resources funds closed in Q2 2013, securing an aggregate $14bn. Eight distressed private equity funds closed in Q2 2013 with total capital commitments of $9bn. Warburg Pincus Private Equity XI was the largest fund to close in the quarter securing $11.2bn.

Funds in Market

As of July 2013, there are 1,958 private equity funds on the road targeting an aggregate $770bn in capital commitments, compared to January 2013 when 1,949 funds were seeking $797bn from investors.

First-Time Funds

Twenty-six fi rst-time funds closed in Q2 2013 securing an aggregate $5bn, down from 39 fi rst-time funds closing in Q1 2013 which secured a collective $7.5bn.

Quarterly Global Fundraising Q1 2008 - Q2 2013

Funds On Road Over Time - Jan 2008 - July 2013

 

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