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Luytens. Through the first nine months of 2021, around half of private capital raised overall was done via such mega-funds, according to data from Pitchbook. These mega funds include Hellman & Friedman’s 10th flagship buyout fund (USD 24.4bn), Silver Lake (USD 20bn) and EQT, with two funds each topping USD 18bn.
Mega funds
The dominance of these mega-funds is set to continue this year with The Carlyle Group’s latest flagship fund targeting USD 27bn, making it the largest private equity fund in history, KKR’s USD 17bn North America Fund XIII and Partners Group’s fourth buyout vehicle, targeting USD 15bn. In total 15 managers intend to raise private equity funds of at least USD
15bn in 2022, according to private markets consultant Hamilton Lane. Fifteen of the 16 largest European funds (over EUR 5bn) are either back fundraising or will be in 2022. The fundraising market in 2022 is set to be so congested by the larger funds coming back to the market more quickly that placement agents say some smaller GPs would be better to simply concentrate their efforts on pre-marketing funds for 2023. One placement agent, who asked not to be named, likened the mood in 2022 to ‘The Hunger Games’. In 2017, private equity funds waited an average 4.8 years before coming back to market. Today, they wait only 2.9 years. With the growth of fund platform extensions, it has become a perpetual cycle for many of the largest GPs with most rarely out of the market.
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The private equity fundraising market in 2022 will be the most congested yet – with 15 funds returning to raise more than USD 15bn each. Where does that leave everyone else?
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hough the level of capital flowing to private equity funds is increasing, the number of funds receiving these allocations is not. What began as a ‘flight to safety’ during the pandemic has now become a ‘flight to quality’ for many of the new LPs entering the market. The number of private equity funds raising capital peaked in 2017 and was down by around 700 last year to 2,445, according to Preqin data. Over the past two years, new investors and those with resource constraints are entrusting their capital to larger, more established managers with vehicles of more than USD 5bn in size. “It can take some LPs a while for their programmes to get beyond the well-known brand names and invest deeper into the market, sometimes 10 years,” says Andrew Bentley, a London-based partner at Campbell
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