PE Key Trends Blog

PE Data Snapshot – A Record Number of Private Equity Funds Seek Investor Capital

Feb 17, 2015 12:19:55 PM

Tags: PE Data Snapshot, V2

According to Palico data, an all-time high of 2,209 private equity funds are currently seeking $811 billion from investors.

The good news for private equity managers is that investor cash is flowing strongly, driven by two years of record distributions. Some $61 billion in capital has been committed to private equity funds through the first half of the first quarter of 2015 - 73 percent more than the amount raised in the same period last year. The paradox, as numerous industry executives have observed, is that while investors are investing large amounts, they are investing with fewer managers, leaving those in the most competitive and crowded sectors fighting for commitments.

Committed Capital YTD & Number of Current Fundraisings - Regions

Breakout by Region
The Most Crowded Markets are North America and Europe

Private equity managers focusing on the United States and Canada top the list of those seeking capital, accounting for 835 fundraisings, or 37.8 percent of the market. However, U.S. and Canadian-focused managers account for a much larger 58.9 percent of the capital raised so far in 2015, indicating the relatively large size of U.S. and Canadian funds, and the popularity of investing in North America at the moment. European funds follow with 27.3 percent of fundraisings and 22.6 percent of capital raised.

Asia-Pacific is Crowded, But Attracts Lots of Capital

Asia-Pacific is the third most crowded region, with 437 funds seeking capital, about 19.8 percent of the global total. Yet Asia-Pacific is more popular than other areas dominated by emerging markets, accounting for 15.8 percent of total global capital raised year-to-date. Other major emerging market regions - the Middle East, Africa and Latin America - represent a combined 15.1 percent of funds soliciting capital and just 2.7 percent of cash raised so far in 2015.

Committed Capital YTD & Number of Current Fundraisings - Strategies

Breakout by Strategies
VC has the Most Funds Vying for Commitments, But Buyout Funds Are Bigger

Among strategies, the most crowded is venture capital, with 521 funds in fundraising mode, some 23.6 percent of the global total. VC funds, which tend to be relatively small, are fourth by commitments, raising 11.3 percent of cash pledged to managers this year. Reflecting their typically larger size, buyout funds are number one by capital raised, with a 34.6 percent share, but the category is only slightly less crowded than VC, with 486 funds seeking capital, some 22 percent of the global total.

Real Asset Strategies Are Helped by Falling Oil Prices and Yield

Real asset private equity funds, those focused on ownership of tangible goods like real estate, fossil fuels, metals and infrastructure, are third by number of funds seeking capital - 18.8 percent - and second in terms of commitments made year-to-date - 17.2 percent. The fairly high degree of commitments reflects rising demand for energy-focused funds in the wake of the recent dramatic fall in oil prices, while for real estate and infrastructure the attraction is regular yields in addition to the traditional promise of private equity: long-term capital gains.

Funds-of-Funds Are Noteworthy for Their Popularity

Funds-of-Funds have raised the third largest amount of money year-to-date, some 14.8 percent, thanks to their growing reliance on secondaries - either through pockets that buy stakes in existing funds or via dedicated specialist secondary funds-of-funds.

Amid the Fundraising Traffic Jam, Palico Can Help

Today's crowded private equity fundraising market can make it difficult for fund managers to stand out and can overwhelm the resources of investors. By bringing the world of private equity to your desktop, Palico makes the process of discovery and engagement easier.