Private Equity Fundraising Activity Continues to Climb in 2015
2015 is on track to match 2014’s annual fundraising total. Through Q1 of 2015, 151 private equity funds secured $94 billion in capital commitments.
2 July 2015
Through the first quarter of 2015, 151 private equity funds — 112 fewer than the same period last year — secured $94 billion in capital commitments, according to Preqin.
Despite the significant drop in number of vehicles closed, the value of capital raised has not fallen proportionally, indicating a notable increase in the average fund size of $597 million, up from $469 million for the same period last year.
Kudos goes to the General Partners (GPs) that were oversubscribed — 74% of funds that closed in the first quarter met or exceeded expectations. The largest closing in the first quarter of 2015 was real estate fund Blackstone Real Estate Partners VIII, with a $13 billion target, and a final close of $14.5 billion (according to Preqin's data).
2015 is on track to match last year’s annual fundraising total, which was higher than any annual amount between 2009 and 2012.
At the current pace, we are pleased to report that Intralinks Fundspace™ continues to be the most widely used investor communication tool by the GP community in raising capital. Nearly 70% of capital raised in the first half of 2014, and 60% of capital raised in the second half of 2014, was completed using the Intralinks Fundspace platform. Intralinks Fundspace continues to play a significant role in helping GPs meet and exceed their fundraising targets.
Looking forward, for the private equity industry remains positive. More investors are allocating capital to alternative investments, with 84% of LPs maintaining or increasing their allocations in the coming year, according to the results of a survey by Preqin. With a substantial amount of dry powder to invest ($643 billion for June of 2015, compared to $337 billion for December of 2014), private equity firms will be competing for attractive deals. Deploying capital to the right deals may prove challenging. Competitive sectors to watch include business services, IT services, and healthcare services — all with hearty cash flows, healthy asset backing, high leverage-ability, and many growth opportunities. These sectors are ripe with promising returns (based on data from Goldman Sachs Private Equity Outlook).
Kylie Horner is an Associate in Strategy and Product Marketing at Intralinks. She is part of the team responsible for determining go-to-market strategies for the debt capital markets and alternative investment businesses. Prior to joining Intralinks, Kylie worked in marketing and communications at ACTIV Financial, a financial information technology firm. She graduated from the University of Colorado at Boulder with a degree in Journalism, and a specialization in global media.