ALTERNATIVES

Private Fund Report

Due to soaring interest in private investments by institutional investors as well as the long-term allocation shift to private markets that we have observed in recent years, Pensions & Investments is launching a new database to cover private funds closed starting in 2010. Along with P&I survey data, P&IQ Searches & Hires database information, Pensions & Investments aims to paint a clear picture of private capital markets growth.

Based on the data collected by Pensions & Investments on private fund closings, as of November 2018 the total amount raised soared to $250.53 billion from $153.1 billion in 2014, an asset growth rate of 63.64% over the period. Private investments saw significant investor interest and strong capital inflows in 2016 and 2017, with the aggregate assets of closed private funds growing 27.72% and 36.29%, respectively, in those years.

Private equity funds raised $135.92 billion in 2018 while infrastructure funds received $42.71 billion. Another $36.21 billion went to real estate funds, while $26.84 billion went to credit and $8.85 billion to energy. Pri- vate equity, the largest private markets as- set class, saw 29.62% in fundraising growth from 2014 to 2018. Infrastructure funds raised 386% more committed capital in 2018 than the $8.79 billion of 2014, the highest growth rate among all as- set classes. Real estate asset growth increased 211%. On the other hand, energy funds saw declining interest from investors with 36.22% less capital raised in 2018.

Pensions & Investments collects data on closed private funds with more than $1 billion in commitments.

The average size of closed private funds was $3.47 billion over the previous nine-year period. The number of the closed funds increased by 184% from 2013 to 2014, though the average fund size dropped to $2.84 billion in 2014 from $4.4 billion in 2013, the highest av- erage fund size seen over the period. So the five-year average closed fund size from 2014 to 2018 was $3.46 billion, slightly less than the average fund size of $3.49 billion between 2010 and 2013. The median fund size of closed private funds was $2.26 billion over the same period, with the highest median fund size of $2.78 billion recorded in 2012.

Click here for the complete private fund close report.