Market at a glance: PE fundraising dips in 2020’s early months

As of March 4, 85 US-based buyout, growth equity, mezzanine and other PE funds had raised $41.2 billion, down 19 percent from a year ago.

With the end of Q1 2020 only weeks away, US private equity fundraising so far this year appears to be falling short of the giddy heights of 2019, according to Buyouts data.

As of March 4, 85 US-based buyout, growth equity, mezzanine and other PE funds had collected a total of $41.2 billion, down 19 percent from the $51 billion raised during the same period last year.

Funds which secured major commitments in this year’s early months include Blackstone Group’s fifth life sciences fund, which brought in $3.4 billion; Odyssey Investment Partners’ sixth mid-market buyout fund, which closed at $3.2 billion; and KKR’s second technology growth equity fund, which closed at $2.2 billion.

US PE fundraising totaled $303 billion at the end of 2019, Buyouts data show, up 24 percent from 2018 and the highest level reached since 2007.

Noteworthy fund stories recently covered by Buyouts

Altaris healthcare fund triples target from predecessor

Altaris Capital Partners kicked off fundraising for its fifth healthcare fund and already has a big investment from New Jersey Division of Investment. The vehicle has a $2.5 billion target, more than triple Altaris’ previous fund, and a $3 billion hard cap.

Aurora hits target, eyes cap on sixth fund

Aurora Capital hit the target on its sixth fund and is now eyeing the cap set at $1.8 billion. The firm invests in mid-market companies in industrial services and distribution, specialty manufacturing and software and tech-enabled services.

Blackstone’s third energy-focused fund passes $4bn mark

In a slow market for energy private equity fundraising, Blackstone is on the verge of closing one of the largest pools in recent years. Blackstone’s third fund secured about $4.2 billion, putting it within striking distance of a reported $4.5 billion target.

CD&R talks to LPs about next flagship fund

Clayton Dubilier & Rice is preparing to go to market with its next flagship buyout fund, which is expected to raise at least $10 billion and probably more. CD&R’s tenth fund, the largest in its more than four-decade history, closed in 2017 at $10 billion.

EIV looks to grow midstream pool in tough fundraising environment

EIV Capital unveiled a fourth fund, as it looks to leverage promising midstream opportunities in an otherwise slow energy fundraising space. EIV is targeting $525 million with a $600 million hard cap, and with a parallel vehicle could raise up to $750 million.

Foresite targets $705m for fifth healthcare fund

Healthcare-focused Foresite Capital, formed by entrepreneur James Tannanbaum, collected about $400 million for its fifth pool. The fund is targeting $705 million, and could secure as much as $750 million, making it Foresite’s largest yet.

Tech-focused Francisco Partners gears up for big fundraising

Francisco Partners, which has been under a harsh spotlight for a past investment in cyberweapons business NSO, is preparing for its biggest fundraising yet. The firm will likely target more than $5 billion for its sixth pool, and potentially $5.5 billion.

Frontier taps into growth equity surge with $850m Fund VI launch

Frontier Growth began marketing a sixth software vehicle, indicating it is looking to leverage recent momentum in growth equity fundraising. The fund has a target of $850 million, which if reached will make it the largest in Frontier’s 21-year history.

Sagard’s healthcare royalty fund led by CPPIB alumnus raises initial $475m

Sagard Holdings, the private investment arm of Power Corp, collected an initial $475 million for its inaugural healthcare royalty fund. Sagard’s platform was created by David MacNaughtan, formerly with Canada Pension Plan Investment Board.

Siguler Guff-spinout Banner Ridge raises $550m for debut secondaries fund

Banner Ridge Partners, launched by Anthony Cusano, the former head of Siguler Guff’s secondaries group, closed its inaugural fund, raising $550 million. The vehicle will buy investor stakes in distressed, special situations and credit funds globally.

TA closes unique double-down fund on $1bn

TA Associates quietly closed a fund that doubles down on investments the firm is selling out of its flagship funds. Meeting its $1 billion target, the vehicle will focus on delivering liquidity to investors as it sells a portfolio company while retaining a stake.

No hurdle, no problem for TA Associates

TA Associates wrapped up a 13th fund last year at $8.5 billion in a fundraising process that was not affected by the vehicle’s lack of a preferred return hurdle. TA, like a handful of other funds, also did not include a preferred return in its prior pool.

Thoma Bravo, amid fundraising frenzy, preps debut small-company fund

In the tech fundraising arms race, Thoma Bravo is bringing a new weapon to the arsenal. It is gearing up to raise a debut small-company pool with a target of up to $1 billion. The fund will focus on software and tech-enabled services opportunities.

Vista sets ascending carry based on performance in next mid-market fund

Vista Equity Partners’ latest fund, which could raise as much as $4.5 billion, charges a premium carry that increases in increments depending on returns. The fund charges the typical 20 percent carry until cumulative distributions represent a 2.5x multiple.