2013 was one of the strongest years for private equity fundraising, with an aggregate $493bn raised by 1,022 funds. What we saw last year was a significant increase in the average fund size, as more capital was placed with fewer fund managers. However, the fact that the private equity industry was able to raise such capital means that investor appetite for the asset class was strong. The question that is on everyone’s lips is whether this enthusiasm for private equity fund investments can be carried on into 2014, and if 2013 was a sign of better things to come or an anomaly.
The first quarter of 2014 saw 185 private equity funds reach a fi nal close and raise an aggregate $98bn, a 14% increase on the amount of capital raised during the same period in 2013, but the lowest number of funds to close in any quarter since Q3 2009, resulting in the continuation of the trend of fund sizes increasing. Preqin’s investor survey, carried out in December 2013, indicated that investors were still keen to commit to private equity funds in short term, with over two-thirds (68%) of LP respondents expecting to make their next private equity fund commitments in the first half of 2014. Private equity dry powder continues to grow, as more capital is raised by private equity fund managers, with $1.1tn available to fund managers as of March 2014, representing a 2.9% increase from December 2013.
Source : Preqin