Secondaries fundraising had biggest drop in 2015

Most strategies saw a dip in fundraising last year compared with a year earlier, with growth funds also experiencing a similar level of decline.

Fundraising for secondaries fell more last year than for any other strategy, according to a report by Bain and Company.

Secondaries saw a 32 percent decline in fundraising in 2015 compared with a year earlier, the greatest drop among the seven strategies that experienced a fall, according to the management consulting firm’s Global Private Equity Report 2016.

The report measured the change based on compound annual growth rate (CAGR).

Buyout, real estate, venture, infrastructure, growth and distressed private equity saw fundraising drop in 2015 compared with 2014. Growth funds fell by 30 percent, the second biggest drop, followed by infrastructure with a 16 percent decrease, and buyout which had an 11 percent decline.

“The modest overall numbers reflected quirks of the calendar as much as anything else and failed to capture the strength of the fundraising environment,” the report noted. “Fundraising activity gained momentum, resulting in scores of new fund offerings that were close to completion by year-end.”

The biggest increase was for mezzanine fundraising which more than doubled with a 118 percent rise, while fund of funds experienced 14 percent growth.

Total fundraising for private equity in 2015 was $527 billion, a 5 percent drop from the previous year, according to the report.

Dedicated secondaries funds currently in market include ICG Strategic Secondaries Fund II targeting $1 billion, Industry Ventures Secondary VIII, which is seeking around $425 million, and Blackstone’s Strategic Partners Fund VII, targeting $5.5 billion, according to PEI Research and Analytics.

Adam DS






Click to enlarge. Source: Bain & Company