Private Equity Fundraising Continues to Surge Ahead in 2014
In the first half of 2014, private equity fundraising had over $222 billion of capital having a final close — up 17% over the same period from last year.
11 September 2014
Who’s NOT raising money?
The private equity fundraising train continues to chug along in the first half of 2014 with over $222 billion of capital having a final close — up 17% over the same period from last year.
It looks like the good times will be continuing as 36% of institutional investors are looking to increase their private equity allocations over the next 12 months according to Preqin. If you want a good example of what the fundraising environment looks like right now, Equistone, the Barclays bank spinoff, is coming back to market after only 18 months since its last closing. Repeat: 18 months. “The reversal of the denominator effect the industry experienced in 2008 through 2010, very high levels of capital distributions, a need for higher yielding investments given zero percent interest rates and all-time highs in the equity markets have driven a surprisingly large uptick in fund flows to the private fund universe”, says Dan Vene, CEO of iCapital Network, an online marketplace connecting qualified investors with private equity fund managers.
European-based managers were well represented at the top of the league tables with Ardian, Permira and Pamplona all raising significant amounts of capital. Also interesting to note, there is a significant uptick in venture commitments, where over $20 billion was closed in the first half of 2014 alone. The trifecta of positive market dynamics: low interest rates, leveraged loan issuance, and a health exit environment, continue to support a return to double digit performance. Valuations might be getting a bit stretched and dry powder nearing an all-time high, but as we’ve said before, an accommodative monetary Fed policy can provide a significant tailwind.
We are pleased to report that our Intralinks Fundspace™ platform continues to be the most widely used investor communication tool by the GP community in raising capital. Nearly 70% of capital closed in the first half of the year was completed using the Intralinks Fundspace platform, representing $132.3 billion of commitments. Intralinks Fundspace continues to play a significant role in helping GPs reach their fundraising targets. Some of that success is evident in the Asian markets, where $16.2 billion was closed in the first half of 2014 using Intralinks Fundspace. A growing number of leading private and growth equity managers in China and Southeast Asia have turned to Intralinks Fundspace to support their expansion in both assets and operational capabilities.
With a healthy base of fresh capital, strong performance and continued interest from the investor community, fund managers certainly are enjoying something of a renaissance — with Europe, Asia and Latin America prime targets for all this new found capital. Whether the pace of deployment at sensible valuations can follow remains to be seen.