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Private Equity Fundraising Slackened in 2014: PEI

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Institutional investors allocated $375.3 billion to private equity investments in 2014, down from $430 billion in 2013, according to a report issued Wednesday by PEI Alternative Insight.

The report noted that some 15% of funds closed in 2014 had yet to be reported, suggesting that the final figure could rival the previous year’s total.

“While 2013’s heights may not have been repeated, it’s been another good year for private equity fundraising,” Dan Gunner, director of research and analytics at PEI, said in a statement.

“However, the larger fund managers continue to dominate and capital is increasingly concentrated among a few leading names.”

Gunner said investors continued to find private equity attractive. “Almost half of those we spoke to planned to increase allocations with only a handful looking to pull back.

“So, we expect to see another strong year in 2015 and, with over 2,200 funds currently seeking investor attention, it is as competitive as ever.”

Funds that invested into North America, Asia/Pacific and Latin America last year experienced relative gains against 2013 figures on the back of a strong fourth quarter, respectively raising $145 billion, $36 billion and $6 billion.

In contrast, aggregate capital raised for pan-European investments plummeted to $18.5 billion from $68.3 billion in 2013.

Buyout funds raised an aggregate $197.9 billion in 2014. North American-focused buyout vehicles accounted for $80.6 billion of that amount, up from $57.8 billion the year before.

Fundraising for debt strategies slowed to $50.3 billion last year after peaking at $71.2 billion in 2013.

Capital raised for secondaries went the other way, coming in at $25.1 billion in 2014, compared with $20.6 billion the previous year.

The report said secondaries got a significant boost from the close of the biggest-ever secondaries fund, the $9 billion Ardian’s AXA Secondary Fund VI.

The largest fund closed was Hellman & Friedman Capital Partners VIII, which raised $10.9 billion.

Following are eight other large closes in 2014:

  • Premira V, $7.7 billion
  • Lone Star Fund IX, $7.4 billion
  • Bain Capital Fund XI, $7.3 billion
  • Clayton, Dubilier & Rice Fund IX, $6.4 billion
  • Centerbridge Capital Partners III, $6 billion
  • Vista Equity Partners V, $5.8 billion
  • Onex Partners IV, $5.7 billion
  • Bain Capital Europe Fund IV, $5.5 billion

— Check out 10 Hedge Fund Trends for 2015 on ThinkAdvisor.