Preqin: PE Funds Aiming For Record $635B In Capital Commitments

Apr 25 2017 | 7:52pm ET

Aggregate capital targeted by private equity companies hit an all-time high in the first quarter as a number of mega-funds seek money from investors, according to new data from Preqin. 

Globally, 1,908 private equity funds are in market at the start of the second quarter, Preqin reports in its Q1 Private Equity Quarterly Update, seeking a combined $635 billion. These tallies compare with 1,834 vehicles seeking $526 billion at the start of 2017. 

Softbank’s mammoth $100 billion Vision Fund, which will be the largest private equity fund of all time when fully funded, accounts for a significant proportion of the current capital target. Meanwhile, China’s $29 billion Capital Venture Investment Fund and Apollo’s $20 billion Apollo Investment Fund IX are also targeting sizeable amounts. 

Other highlights from Preqin’s first quarter PE update:

  • Highlighting the dominance of the biggest firms, the ten largest private equity funds in market are targeting a 
combined $203 billion, 32% of the industry total. 

  • North America-focused funds account for over half of all vehicles on the road, which are targeting a combined $336 billion, as it remains the most targeted region for private equity fundraising. 
  • Asia has overtaken Europe as the second most targeted region for private equity investment, with 370 vehicles seeking $157 billion of investor commitments to deploy in Asia. 

  • Three of the five largest private equity funds on the road are based in Asia, including the China state-owned Capital Venture Investment Fund.
  • Over a third (37%) of private equity funds in market have spent more than two years marketing themselves to investors, and 31% of vehicles have spent less than a year on the road thus far. 

“Private equity fundraising has become even more competitive at the top end of the industry, with the launch of Softbank’s $100 billion hybrid vehicle and increased participation from state-owned entities in Asia,” said Christopher Elvin, Preqin’s head of private equity products, in a statement. “These mega funds serve to drive headline figures, but…the private equity fundraising market remains incredibly competitive [as] Q1 2017 alone saw a net increase of 74 vehicles seeking investor commitments. 

“However, fund managers coming to market are targeting an investor base that is still very positive towards private equity,” he added. “In a low interest rate environment, the asset class will continue to appeal to investors looking for high absolute returns and portfolio diversification. Moreover, because of the accelerated rate of distributions, investors are looking to increase their exposure to the asset class.”

Founded in 2003, Preqin is a leading source of information for the alternative assets industry, providing data and analysis via online databases, publications and bespoke data requests. More than 47,000 professionals located in over 90 countries use the company’s products for a range of activities including investor relations, fundraising and marketing, and market research.

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