Asia Pacific LPs put up nearly 25% of EQT’s $6.5b fund
EQT Partners has raised EUR4.75 billion ($6.5 billion) for its sixth European buyout fund, with Asia Pacific LPs accounting for 23% of commitments, up from just 5% in the firm’s previous vehicle. According to people familiar with the situation, Chinese investors alone had been interested in putting up 15% of the total capital.
Middle East investors contributed another 5% as, for the first time ever, non-European investors failed to account for the majority of capital in an EQT fund, The Financial Times reported.
The Scandinavian firm took nine months to surpass its initial target of EUR4.25 billion in what is the largest fundraise by a European private equity house since the global financial crisis. However, BC Partners is likely to assume this mantle shortly, with the impending announcement of a EUR6.5 billion close for its latest vehicle.
The fundraising success of large buyout firms is seen as indicative of an environment in which investors concentrate on the industry leaders, leaving many smaller players without allocations.
As of October, 1,728 funds are in the market, seeking to raise $706 billion, up from $680 billion sought by 1,676 funds in June, according to Preqin. Global fundraising by private equity vehicles closing in the third quarter was down 46% on the previous quarter. A total of 97 buyout funds raised $44.8 billion in the three months ended in September compared to $82.8 billion raised by 175 vehicles in the second quarter.
EQT and BC were among the 109 funds that held interim closes during the period, securing commitments totaling $42.7 billion.
Joseph Landy, co-president of Warburg Pincus, said last month that Asian LPs are maintaining or increasing their allocations to private equity on a percentage basis, although many are still subject to internal constraints as to what they can invest in.
Warburg is among a host of leading US and European buyout firms expected to launch their latest round of mega-funds in the second half of 2011 - the first time many have tapped the market for large sums of money since before the global financial crisis. The Carlyle Group, Bain Capital, KKR, Vestar Capital, Thomas H. Lee Partners, Apax Partners, Permira, EQT Partners and BC Partners are among those tipped to seek investment alongside a host of leading venture capital players.
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