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Alternative Market Briefing

Global private equity fund-raising reach $5tn in capital over the past five years

Friday, March 05, 2021

Laxman Pai, Opalesque Asia:

Global private equity fund-raising of $989 billion was a decline from 2019's all-time record of $1.09 trillion, said a study. But it was still the third-highest total in history, and if you add in the $83 billion raised for SPACs, it was the second-highest.

According to the report "The Private Equity Market in 2020: Escape from the Abyss" by Bain, the industry has raised almost $5 trillion in capital over the past five years.

Buyout funds alone raised about $300 billion in 2020, or $340 billion if you include SPAC capital aimed at buyout-type targets, estimated at $41 billion, it said.

"It's hardly surprising that many GPs were afraid Covid-19 would put an end to the past decade's golden era of private equity fund-raising. But those fears turned out to be unwarranted. LPs continue to view private equity as a haven in the storm. Institutions did take a pause in April during the first peak of the Covid-19 crisis but quickly got back to business during the summer," the report said.

According to Private Equity International's December 2020 LP Perspectives Study, around 80% of LPs are confident private equity will continue to perform in 2021, and close to 40% say they are under-allocated to the asset class. The vast majority plan to either increase or maintain their commitments in 2021.

As enthusiastic as LPs are, however, they are becoming increasingly picky about the funds in which they invest. A flight to quality in 2020 benefited......................

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