Global fund managers raised $100b in first quarter this year: Preqin

Photo: Reuters

The private equity (PE) and venture capital (VC) industry continued to grow in the quarter ended 31 March, but the capital is getting concentrated among a few large fund managers, according to a report by alternative assets tracker Preqin.

Around 219 funds have raised a combined $100 billion in the three months ended 31 March, compared with the $95 billion secured in the year earlier, the report said. While the capital raising number remained almost flat, the number of fund closures has seen sharp divergence, with 340 funds closing in the first quarter of 2018. This indicates that capital is becoming more concentrated among a few large funds.

In fact, Q1 2019 marks a five-year low in the quarterly number of fund closures, the report added.

Among Asia-focused funds, this downward trend is even more pronounced with 28 funds securing $14 billion in Q1 2019, which represents the fifth consecutive quarterly decline in the number of funds closed.

However, Preqin said that this was not necessarily indicative of a slowing market. “There are a large number of Asia-focused funds currently in market, many of which have already secured significant capital through interim closes. It may suggest that, in a crowded marketplace, fund managers are finding it more difficult to attract sufficient capital to complete their fund-raising process,” the report said.

The first quarter also saw fund-raising activity refocus on the North American market, the largest market for PE/VC funds. Investment vehicles targeting the region marked their second highest first quarter fundraising total with 133 funds securing $63 billion.

Europe-focused fundraising activity struggled to rebound from the lull, with Q12019 recording the lowest level of activity in an opening quarter since 2015.

The top PE funds, which achieved a final close in Q1, included $12.6 billion US-focused buyout fund Thoma Bravo Fund XIII, $7 billion US-focused buyout fund Genstar Capital Partners IX and $4.6 billion Asia buyout fund from TPG Capital—TPG Asia VII—for which India forms a major market.

While the number of fund closures globally was low, funds that were able to close in Q1 2019 did so quickly and successfully, said Preqin.

“The proportion of funds failing to reach their targets has fallen year-on-year to reach a new low of just 16% in Q1. At the same time, six out of 10 funds closed had been in market for 12 months or less, a significant jump from previous years,” the report said.

This points to the emergence of a two-tiered fundraising market, wherein experienced fund managers are routinely oversubscribed and, therefore, can raise large sums of capital in a quick fundraising process, it added. The PE fundraising market continues to be a highly competitive one with almost 3,926 funds seeking an aggregate $1.0 trillion at the end of the first quarter of 2019.

Also Read:

Blackstone said to accumulate over $22b for its largest buyout fund yet

India PE, VC fund managers have $28b in assets under management

This article was first published on livemint.com

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.