Private Equity Fundraising Plummets to Lowest Levels Since 2003
Summary
Over the past week Preqin has directly contacted over 1,500 fund managers around the world with a vehicle in market to enquire as to their fundraising status, and importantly whether they had already held, or were planning to hold, a final close in Q3 2009.Preqins recent survey of institutional investors in the sector would suggest that the latter is the case, with a whole swathe of significant private equity LPs readying themselves to re-enter the market in the final quarter of this year and into 2010.Just 6% of investors are intending to decrease their exposure to private equity over the next three to five years.Comment:“Historical data shows that the summer months of Q3 often represent a relatively slow quarter for fundraising in any given year.Many of the funds that are closing are doing so short of target, and we have seen a number of fund managers putting their fundraising efforts on hold until 2010, or abandoning them altogether for the foreseeable future.Clearly the problem is not on the supply side – although we have seen the number of offerings on the road drop significantly over the course of 2009, supply is still outstripping demand, with the amount of capital available for new investments significantly down on recent years as institutions remain reluctant to commit to new vehicles.Preqins recent survey of institutional investors in the sector would suggest that the latter is the case, with a whole swathe of significant private equity LPs readying themselves to re-enter the market in the final quarter of this year and into 2010.