Global fundraising in 2015 posted the best first quarter in seven years, attracting some $110bn (€100.8bn) in commitments, according to global fund advisory Triago.
The news emerges amid an ongoing trend of record distributions being recycled back into new commitments. Last year investors received distributions to the tune of $477bn, while $438bn worth of new funds were raised.
Performance in 2015 is expected to be better yet, with Triago predicting global fundraising to reach $488bn on the back of $503bn distributions, if the first quarter’s fundraising pace is sustained. Such levels of capital raised have not been seen since the pre-crisis days of 2007 – 2008.
Add to that the so called “shadow capital” – commitments through non-fund structures such as co-investment, separate accounts and direct investment – and 2015 is likely to set an all-time high in the history of private equity fundraising.
The problem for most of private equity, is therefore not how to raise the capital, but how to deploy it. Capital called by fund managers for new private equity investments in the first quarter of the year, expressed as a percentage of committed but uninvested capital, fell to a 30 per cent annualised rate, according to Hamilton Lane. That’s the slowest investment pace seen since 2009, and well below the ten year average of just over 40 per cent.