April 29, 2014

Private Equity Fundraising Remains Strong in 2014

Holland & Knight Alert
Bradley M. Van Buren

HIGHLIGHTS:

  • Private equity fundraising during the first quarter of 2014 continued to thrive as it did last year, the most active year since 2008.
  • The ongoing uptick is attributed to increases in limited partner money going into private equity and a surge in micro-funds.

Coming off the best year for private equity fundraising since 2008, the first quarter of 2014 proved to offer much of the same. According to Pitchbook's 2Q 2014 U.S. PE Breakdown, 74 funds closed on a total of $39 billion in commitments in 1Q 2014 and 95 percent of the funds were able to reach their fundraising goal. Pitchbook attributes the 1Q 2014 success to an increase in limited partner money being allocated to private equity and a recent surge of funds with less than $100 million in commitments ("micro-funds"). Of the fund closings in 1Q 2014, 45 percent were attributable to micro-funds. 

With the surge in micro-funds and what appears to a renewed limited partner interest in lower vintage funds, it may be an optimal time for emerging managers to begin positioning themselves for a launch.

Holland & Knight's Private Investment Fund Formation Team is well-positioned to assist with fund formation and can discuss the steps required for an efficient fund launch. Please contact the authors for more information.  


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