PE Key Trends Blog

The 10 Most Popular Fundraisings In Palico's Digital Marketplace*

Oct 6, 2017 10:06:44 AM

Tags: Palico Top 10, V2


*over six months through October 4

Based on the number of investors who’ve reached out to managers, the most salient aspect of the current top ten investable fundraisings in Palico’s digital private equity marketplace is range. Strategy-wise, the fundraisings cover everything from buyouts to credit, in markets stretching from PE’s traditional U.S. homeland to the frontiers of Sub-Saharan Africa and the Philippines.

PE Fundraising Records are Being Broken in Quick Succession

Private equity fundraising is on pace to bring in a record $561 billion across all regions and strategies in 2017. Yet ironically, fundraising for small and mid-sized vehicles, traditionally the beating heart of the market, is difficult. A historically disproportionate share of capital is going to large funds, very large funds indeed. This year we’ve seen Apollo raise the largest buyout fund ever at $24.7 billion and KKR gather $13.9 billion for the biggest ever North American private equity pool. Silver Lake raised $15 billion, briefly an unprecedented sum for a technology-focused vehicle, only to be surpassed by SoftBank’s $93 billion Vision Fund, not only the largest tech pool, but also the biggest private equity fund ever raised - an amazing four times the size of the previous record holder (the Apollo fund mentioned above). Private equity fundraising records are being quickly achieved only to be quickly broken.

Not a Single Billion Dollar Fund Among the Lot

At a time when a historically disproportionate share of capital is going to mega funds, not one fundraising among Palico’s 10 most popular is seeking a billion dollars or more - the €700 million ($820 million) target of Idinvest Private Debt IV is the biggest; the average size is $213 million. With Palico, managers of small and midsized fundraisings reach the same varied international audience of LPs that large fund managers do by jetting around the world (and spending a fortune). Indeed, Palico is the largest LP venue in the world, with 3,100 accredited investors from over 100 countries browsing for investment opportunities; they range from high net worth individuals to pension plans and sovereign wealth funds. Face-to-face meetings remain part of the investing process with Palico, but they’re much less likely to be a waste of time for both managers and investors.

A Place Where Emerging Managers Shine

While the 10 most popular investable fundraisings on Palico include advanced iterations from long-established teams, the majority of vehicles are from emerging managers - those offering either their first or second discretionary private equity fund. A range of recent surveys demonstrate that investor demand for emerging managers is on the rise, as top quartile persistence - back-to-back outperformance of consecutive PE funds from the same manager - is on the decline. Other studies show that emerging managers achieve better performance on average than managers that have moved beyond their second fund. Again, Palico offers a digital venue that makes discovery of often smaller emerging managers easier.

A Rich Variety of Offerings in Less Crowded PE Strategies

At a time of record high prices for large buyouts, funds in less crowded strategies make up all of the top 10 fundraisings in Palico’s marketplace. With more than 3,000 private equity fundraisings worldwide seeking in excess of $1 trillion, finding such funds without the finger-tip navigation a digital marketplace provides is a time consuming process for both small and large investors.

Palico Democratizes Private Equity Investment

Although it fits seamlessly with traditional means of raising capital, Palico is a disruptor that’s altering private equity fundraising and secondary sales. In today’s more diverse private equity universe, primaries, secondaries and co-investments - anywhere in the world - are easy to find using Palico’s online marketplace. Palico offers LPs and GPs more opportunity to discover, analyze and invest.

"Palico allows us to cast a very wide net for investment opportunities."

John A. Haggerty, Meketa Investment Group