Global PE fundraising endures weak fourth quarter

Total fundraising for 2011 came to $262.6 billion as 603 vehicles reached a final close. On average, the length of time a fund spent in the market fell during 2011 from 18.7 months in 2010 to 16.5 months. There are currently 1,823 funds seeking an aggregate $739.6 billion.

"Despite almost three-quarters of investors planning to make at least one new private equity investment in the next 12 months, the record number of funds on the road means that the market will remain extremely competitive during 2012. Add to this the fact that re-ups are being closely scrutinized - 84% of investors are considering new fund manager relationships - and managers will need to think carefully about the fund terms and conditions they offer investors in addition to their proposed strategies in order to achieve fundraising success," said Helen Kenyon, a senior manager at Preqin.

Although EQT's seventh European buyout fund was the largest to close in the fourth quarter, attracting EUR4.75 billion, European firms were the least prolific. In total, 28 European vehicles raised $18 billion while 65 North American funds attracted commitments of $28.5 billion. As for the rest of the world - which is dominated by Asia in private equity terms - 27 funds closed with total capital of $5.8 billion.

Buyout funds were the most active, with 19 vehicles raising a total of $18.4 billion. Real estate was also popular, with 22 fund closes and $8.7 billion in capital, while the same number of venture funds attracted $5.7 billion. A total of $4.8 billion was committed to just four distressed asset vehicles.

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• Fundraising