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Private Equity Fundraising Rebounds in Q3, Driven by Large Funds

October 05, 2018, 07:11 AM
Filed Under: Private Equity

Following two quarters of lower private equity fundraising, Q3 activity has picked up, with 214 funds raising a total of $121 billion, Preqin reports.

Analysts expect these  figures to rise by up to 10% as more information becomes available, but the quarter has already crossed the $100 billion mark for the  first time since Q4 2017. However, there was a significant decrease in the number of funds closed in Q3, down from 304 funds that closed in the previous quarter. The disparity is because a small number of large funds have accounted for most of the capital raised.

According to Preqin the ten largest funds closed in Q3 have secured a combined $66 billion, or 55% of the total. Meanwhile, private equity dry powder has continued to climb, reaching $1.14 trillion as at September 2018.

"While the key theme of the  first half of 2018 was the slowdown from 2017’s frenetic fundraising levels, Q3 seems to be picking up the pace again. While the full-year fundraising total is unlikely to match 2017, the pace is still on par with activity seen in 2015 and 2016," Preqin said. "Moreover, it is increasingly being concentrated among a small number of large fund managers. This is a trend we have noted before, but it is accelerating, possibly in response to investor uncertainty. With half of investors expecting public markets to see a downturn within the next 36 months, they may be seeking the security of fund managers with whom they have an existing relationship, and who have a proven track record."

Click here to read the report in its entirety.





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