Private equity funds are closing more quickly in 2012 than they did in 2011, according to research from Preqin.
The data provider’s latest numbers show that whereas the average PE fund took 18.5 months to close in 2011, so far in 2012 the average is 16.7 months, suggesting some funds are succeeding in attracting institutional capital.
A total of 145 private equity funds held interim closes in Q2, raising an aggregate $48.5 billion towards their overall fundraising targets, up from the $33.7 billion raised in interim closes in Q1.
Another 126 funds reached a final close in Q2 2012, having raised an aggregate $61.4 billion, down slightly from 167 funds and $68.1 billion in Q1. That said, Preqin expects the Q2 figure to increase somewhat as more information becomes available.
Broken down geographically, Q2 saw 65 US-focused funds (with a total of $34.8 billion), 28 Europe-focused funds (with $17.7 billion) and 33 Asia and Rest of World funds (with $8.9 billion) close.
AXA Private Equity closed the largest fund in Q2 2012—the Europe-focused AXA Secondary Fund V with $7.1 billion. Other funds to close in Q2 included the $6.25 billion buyout fund Green Equity Partners VI, and the $3.635 billion American Securities Partners VI.
According to Preqin, there are now 1,872 private equity funds in the market market, targeting a collective $801 billion—up from 1,846 funds hoping to attract $758 billion in January 2012.
Warburg Pincus has the largest private equity fund in market by target size, with the 2012 vintage balanced fund, Warburg Pincus Private Equity XI, targeting $12 billion. The vehicle held an interim close in May 2012 on $5 billion.
“Private equity fundraising conditions remain extremely challenging for fund managers; however, momentum is starting to shift in favor of GPs. The number and value of interim closes completed in Q2 2012, and the fact that funds are closing quicker on average than last year, shows that investors are still committing capital to funds. Ninety percent of investor respondents to a recent Preqin survey plan to increase or maintain their allocations to private equity over the next 12 months, which also suggests increasing momentum in the market. The difficulty facing managers coming to market remains standing out from the record number of funds currently on the road. With the market so crowded, fund managers will have to work hard to ensure that they position their vehicles correctly and do their homework in targeting the right investors for their offering,” said Preqin’s Richard Stus, in a statement.