Private equity market remains strong

Some other noteable facts from the report show the following:

• 52% of funds closed in 2014 exceeded their fundraising target, while a further 17% met their fundraising target; this compares with 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;
• a record 2,252 private equity funds are currently in market seeking an aggregate US$800 billion, the highest aggregate target since January 2009; and
• dry powder (capital already committed but not invested yet) for all private equity funds stands at an all-time high of US$1.2 trillion, up from US$1.1 trillion in January 2014.

“Investor appetite for private equity remained strong throughout 2014, with the amount of capital raised by fund managers on a par with the last couple of years,” says Christopher Elvin, Preqin’s head of private equity products.

He notes that the largest brand name managers are receiving the majority of investor commitments, with smaller managers—particularly first-time funds—finding it difficult to raise capital.

“Two positives to come out of 2014, however, are the falling average time on the road and the significant proportion of managers that are closing at or above target,” Elvin says. “Furthermore, investor sentiment toward the asset class remains very positive, and almost half of investors surveyed by Preqin in December expect to make their next private equity fund commitment in the first half of 2015.”

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