Time Spent Raising Capital
Private Equity & Venture Capital Emerging Managers
Recently Peqin reported historical data on time necessary to raise assets for private equity emerging managers. Here are some highlights:
In the last ten years, since 2011, while fundraising, private equity managers needed 6 to 9 months to get the first allocation. At the first close, managers reached approximately half of their target size. That percentage range from 49% in 2012 to 62% in 2020. Data shows that in 2020 investors were either writing larger initial checks or more investors participated at the first close.
Minimum 15 and maximum 19 months, on average, it took private equity managers to get to the final close.
From 2017 to 2021 YTD, all the funds were oversubscribed (102% in 2018 and a maximum of 110% in 2021 YTD). In the period from 2011 to 2016 final close was just below 100%.
We can contrast these results with 2001, when it took 0.4 months for the first close and 8 months to the final close, with 77% of the target size reached at the end of the fundraising. Similarly, in 2000, funds were oversubscribed at the first close, to the tune of 114%, which took only 7 months to achieve.