Private equity fundraising remained strong in 2014

GrowthLinePrivate equity fundraising remained strong in 2014, although capital was concentrated among fewer funds, according to Preqin.

According to Preqin, 977 private equity funds held a final close throughout the year raising a total of $486 billion (€410 billion), higher than any annual amount between 2009 and 2012, and on track to match the 2013 total, as at mid-December.

However, the $486 billion (€410 billion) in capital commitments was spread between the lowest number of funds in any year since 2009.

The amount of capital raised is on track to match the amount of capital raised in 2013 ($531 billion / €446 billion), as Preqin expects the 2014 fundraising figure to increase by 10-20% as more information becomes available.

For the funds that did close, the average time to reach a final close fell by two months; funds that closed in 2014 took an average of 16 months, compared to 18 months for funds closed in 2013.
There was increased fundraising success in 2014, with 52% of funds closed above their fundraising target, while a further 17% met their fundraising target. This compares to 47% of closed in 2013 funds which exceeded their target.

First-time funds closed in 2014 accounted for 7% of total capital secured by funds over the year, the same proportion as in 2013.

The largest fund to close in 2014 was buyout fund Hellman & Friedman VIII, which held a final close on $10.9 billion (€9.15 billion).

According to Preqin, investor sentiment towards the asset class remains very positive with almost half of investors surveyed by Preqin in December expect to make their next private equity fund commitment in the first half of 2015.