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Preqin: Private equity fundraising softens in Q3

Wednesday, October 13, 2021
Opalesque Industry Update - Private equity has been performing well since the pandemic, but some signs of market softness may be appearing in Q3, according to the Q3 2021 Private Equity Quarterly Report published by Preqin, the global leader in alternative assets data, tools, and insights.

Fundraising numbers are slightly softer than the same period last year. Aggregate private equity capital raised was $83bn, down 21% year-on-year. North America remains the dominant source of buyout deal flow, having registered $107.2bn in aggregate buyout deal flow during Q3, compared to only $61.5bn in the same period last year.

Preqin data also shows that private equity exit activity has cooled down slightly, with 171 funds closed globally in Q3 2021, compared to 202 in Q3 2020, a drop of 15%. Exit value was down a modest 2.4% year-on-year, along with the SPAC craze starting to moderate on the back of the SEC's clampdown. However, with $135bn of SPAC capital remaining that is still seeking acquisitions, SPACs will likely remain a positive catalyst for both exit and deal activity across the private equity market for the time being.

Cameron Joyce, Vice President, Research Insights at Preqin, said: "Private equity is buoyed by negative real long-term interest rates, fuelling the virtuous circle of fundraising and competition for deals. More importantly, perhaps, is that the interest rates support and justify the lofty valuations multiples that are being applied to deals in the current market-and even open the possibility of continued multiple expansion."

Key Q3 2021 Private Equity Facts:

  • Private equity exit value was down 2.4% year-on-year. However, it was a much starker drop from Q2 2021 which registered an exceptional $245bn in global exits - of which $421bn was from North America.

  • 171 funds were closed globally in the period compared to 202 in Q3 2020.

  • Aggregate capital raised was $83bn, down 21% year-on-year.

  • North America registered $107.2bn in aggregate buyout deal flow during the quarter, compared to only $61.5bn in the same period last year.

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