First-time fundraising marches on despite massive headwinds

Emerging manager fundraising, including first-time funds, continues on despite some historic challenges in the ability of new firms to attract capital from potential investors.

Buyouts tracks mostly first-time fundraising through our sources and official documentation (if it exists). We’ve built a home-grown database of 35 funds (and growing) in the market, how much they’ve raised, what they’re targeting, their strategies and who runs them. Our list is always growing and we just updated the list with some new names (and took off a few that held final closes earlier this year). Check it out here.

New additions to the list include Nexa Equity, launched by ex-Insight Partners executive Vlad Besprozvany for software investments; Marlinspike Partners, led by Neil Keegan and Mislav Tolusic for investments in “dual-use” tech with government and private industry applications; and Sandbrook Capital, targeting $1 billion for investments into the energy transition.

Last year, first-time funds set a record, collecting about $14.1 billion across 60 funds, according to Pitchbook’s 2021 Annual US PE Breakdown.

The number of funds that closed fell from the prior year, when 81 funds raised $9.6 billion, Pitchbook said. “The impressive capital raised total is primarily due to outsized fund closes by a few high-profile entrants,” according to Pitchbook.

Preqin found that last year, 553 first-time funds collected more than $46 billion globally. That was down from the $52.8 billion raised by 572 funds globally in 2020. The peak was in 2017, when 924 funds globally raised $196.7 billion, according to Preqin’s information.

Overall, fundraising has slowed mightily from last year. In the first half, 417 buyout, growth, venture and other private equity vehicles raised almost $255 billion. That’s down 18 percent from a year earlier, according to Buyouts’ data. (Check out Buyouts’ new interactive fundraising chart to drill down on the funds behind the quarterly numbers).