Fundraising picks up in Q3 with bonanza yet to come

The close of Strategic Partners VIII on $11.1bn has helped fundraising rebound in the third quarter, with Ardian and Lexington Partners still to hold their final closes.

Secondaries funds raised nearly three times more in the third quarter than in the previous two combined, as the first of the mega-funds in market reached final close.

Four secondaries funds raised a combined $14.3 billion between July and the end of September, compared with $5.2 billion in the first half, according to Secondaries Investor data. This was largely driven by Blackstone’s Strategic Partners VIII, which wrapped up fundraising in July on $11.1 billion after around 14 months in market. The fund was targeting $8 billion, Secondaries Investor reported.

Glendower Capital raised the bulk of the remainder with Glendower Capital Secondary Opportunities Fund IV, its first vehicle raised after spinning out from Deutsche Asset Management. The vehicle held its final close in July on its $2.7 billion hard-cap after 13 months of fundraising and is among the largest first-time private equity funds ever raised.

Impact secondaries specialist North Sky Capital, which raised $220 million for Clean Growth Fund V, and the $296 million Njord Partners Special Situations Fund II, which makes primary and secondaries investments in the European mid-market, were the other funds to close in the third quarter.

The $19.5 billion raised so far this year is more than half the $41.2 billion raised during the same period last year. Final closes from Ardian and Lexington Partners, among others, are expected in the next 12 months.

Ardian has reached the $12 billion target for the commingled portion of its ASF VIII secondaries programme, according to Secondaries Investor data, while Lexington’s Capital Partners IX has raised $11.73 billion of its $12 billion target, according to filings with the US Securities and Exchange Commission.

There are at least 59 secondaries funds with disclosed targets in market seeking at least $92 billion, Secondaries Investor data show. This includes private equity, infrastructure, real estate and preferred equity.