Q1 Fundraising Difficult For Rookie PE Managers

Apr 4 2013 | 9:04am ET

Private equity managers closing their first funds in Q1 2013 secured just $4 billion in aggregate capital, down from $32 billion in Q2 2008, according to Preqin.

The data provider's research shows 129 private equity funds staged final closes in the first quarter of this year, raising a total of $67 billion but first-time managers accounted for only 6% of that total, down from a peak of 20% in Q4 2010.

The first quarter of 2013 saw fewer first-time fund closes—28—than any quarter since 2008. Two of the most notable were Geneva Star One, which closed at $250 million, and NorthEdge Capital, which closed at £210 million, beating its £200 million target.

Preqin says 46% of investors polled in December 2012 will invest in or consider investing in first-time funds this year.

Preqin also found that buyout funds raised $26 billion in Q1 2013, up 44% on the year, and that 29% of  all buyout capital raised in the quarter was secured by Cinven V, the largest fund to close in Q1 2013, at €5 billion.

Distressed private equity fundraising decreased significantly in Q1 2013, with eight funds raising an
aggregate $1.6 billion compared to 13 funds and $14.2 billion a year earlier. Preqin says investor appetite for distressed private equity remains strong, with 23% of investors interviewed in December 2012 planning to invest in distressed private equity funds in 2013.

The data provider says 76% of investors plan to commit the same amount of capital or more in 2013 than 2012, and a further 10% expect to return to the asset class in 2013, having made no new commitments in 2012.

“Private equity fundraising in the first quarter of 2013 was relatively robust, with the total capital raised expected to be at similar levels to Q1 2012,” said Preqin's Helen Kenyon. “First-time fund managers, however, struggled to attract significant levels of investor capital in the quarter...Though this is concerning news for managers seeking to raise capital for their first fund, many investors remain open to investing with emerging managers...”


In Depth

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...

 

From the current issue of