Preqin: GPs hit targets in shortest amount of time since 2008

Private equity funds closed after an average of 14.8 months on the market, the shortest period since the global financial crisis and almost six months less than what they averaged in 2010, according to Preqin. More general partners held final closes at or above their fundraising targets in the first quarter than they did during the same period last year, reinforcing the notion that fundraising has gotten easier over the last year.

“It seems as though anyone can raise money right now,” one LP told Buyouts.

About three quarters of the funds that held closes during the first quarter met or exceeded their targets, compared to 69 percent of funds that closed during the same period last year, Preqin said.

“The time being taken to raise a fund on average has dropped considerably, and now sits at less than 15 months; seventy-four percent of funds closed in the first quarter met or exceeded their fundraising targets; and the average fund is notably larger than funds closed in 2014,” Christopher Elvin, head of Preqin’s private equity segment, said in a statement.

At the Buyouts East conference last month, several LPs said more firms are increasing the sizes of their funds beyond previously stated hard caps to accommodate demand.

While certain GPs did have an easier time raising more money during the first quarter, Preqin data also suggests fundraising may slow after “two strong years of fundraising,” according to Elvin’s statement.

“The quarter saw fewer funds reach a final close than in any other quarter for over 10 years, and not since the start of 2013 has less capital been raised in a quarter,” Elvin said. “Furthermore, the number of funds on the road seeking capital, which has been rising steadily since 2010, has taken a small dip in March 2015.”

Photo courtesy of iStock/Chris Lamphear