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Bailey McCann, Opalesque New York: While many investors are sticking by private equity and private credit, that doesn't mean everything is smooth sailing. According to PitchBook's private capital fundraising report, raising new capital got harder in the third quarter.
Aggregated fundraising across the private investing universe was down 7.7% to $1.35 trillion in the 12 months leading up to September 30, as only funds focused on venture capital and real assets managed to surpass year-ago levels.
Early data suggests capital raising will be even thougher throughout the fourth quarter. "Overallocated LPs are being asked to re-up at levels well above 2023 allocation budgets, and distributions have fallen precipitously in a frozen exit environment, both phenomena leading LPs to have to make tough choices such as step-downs in their allocation sizes or skipping certain follow-on funds entirely," the report says.
This trend is likely to make life extremely difficult for emerging managers as many LPs are unwilling to consider new relationships in this environment.
According to the report, funds over $1 billion in commitments took in 73.2% of 2022 commitments through Q3, though they were only 11.7% of fund closings by number. Real assets funds have also gained favor with investors. 12-month real assets fundraising, at $147.2 billion, is up 22.6% over a year ago.
Geographically, North American funds continue to dominate, with more capital rais...................... To view our full article Click here
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