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  • PREQIN QUARTERLY UPDATE: PRIVATE EQUITY & VENTURE CAPITAL Q1 2018 Insight on the quarter from the leading provider of alternative assets data

    Content includes:

    Fundraising Funds in Market Institutional Investors Buyout Deals and Exits Venture Capital Deals Fund Performance and Dry Powder

  • We congratulate our clients on the successful

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    Americas — Europe — Middle East — Asia Pacific

    Securities placed through CSP Securities, LP Member FINRA/SIPC Authorised by FINMA CMS license holder from the MAS

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  • 3

    DOWNLOAD DATA PACK: www.preqin.com/quarterlyupdate

    FOREWORD - Christopher Elvin, Preqin

    In Q1 2018, 180 private equity funds reached a fi nal close raising an aggregate $80bn, the fi rst quarter since Q3 2016 in which capital commitments totalled less than $100bn. The fi rst quarter of each year typically sees a slowdown in fundraising activity following a fl urry of fund closures at the end of the year; however, Q1 2018 saw the lowest number of funds closed in a fi ve-year period. Capital remains concentrated among the top managers: over half (59%) of capital raised in Q1 was secured by the 10 largest funds.

    At the start of Q2 2018, there are a record 2,575 funds in market collectively targeting $844bn in capital commitments. Despite the variety of investment opportunities, fund manager and fund selection remains critical, and from a GP perspective, competition for investor capital remains fi erce. Fundraising has become even more competitive at the top end of the industry with the launch of two mega funds in Q1 2018: Sino-Singapore Connectivity Private Equity Fund, targeting $15.8bn, and Asian Institutional Investor Joint Overseas Investment Fund, targeting $15bn.

    Strong fundraising and a challenging deal environment has resulted in dry powder levels reaching $1.09tn. Although private equity-backed buyout deal activity in Q1 was 6% lower in comparison to Q1 2017, deal value was 90% higher. No doubt deal value was buoyed by the merger of Keurig and Dr Pepper, valued at $21bn, and the takeover of the Financial and Risk Business of Thomson Reuters Corporation led by Blackstone Group, with participation from CPP Investment Board and GIC, valued at $17bn. Encouragingly, Q1 2018 marked an 11% increase in the number of venture capital-backed fi nancings compared to Q1 2017, and a 57% increase in deal value.

    Buyout exit activity fell for the fi fth consecutive quarter, with 354 exits valued at an aggregate $52bn, representing the lowest quarterly number of exits since 2010. Despite this, investor appetite for private equity is still strong: with nearly $2.0tn in capital distributed since 2013, investors have more liquidity in their portfolios and the majority (59%) of those interviewed by Preqin at the end of 2017 planned to commit to four or more funds in the next 12 months.

    We hope you fi nd this report useful and welcome any feedback you may have. For more information, please visit www.preqin.com or contact [email protected]

    p5 Fundraising

    p8 Funds in Market

    p10 Institutional Investors

    p12 Buyout Deals and Exits

    p14 Venture Capital Deals

    p16 Fund Performance and Dry Powder

    p18 Conferences

    All rights reserved. The entire contents of Preqin Quarterly Update: Private Equity & Venture Capital, Q1 2018 are the Copyright of Preqin Ltd. No part of this publication or any information contained in it may be copied, transmitted by any electronic means, or stored in any electronic or other data storage medium, or printed or published in any document, report or publication, without the express prior written approval of Preqin Ltd. The information presented in Preqin Quarterly Update: Private Equity & Venture Capital, Q1 2018 is for information purposes only and does not constitute and should not be construed as a solicitation or other off er, or recommendation to acquire or dispose of any investment or to engage in any other transaction, or as advice of any nature whatsoever. If the reader seeks advice rather than information then he should seek an independent fi nancial advisor and hereby agrees that he will not hold Preqin Ltd. responsible in law or equity for any decisions of whatever nature the reader makes or refrains from making following its use of Preqin Quarterly Update: Private Equity & Venture Capital, Q1 2018. While reasonable eff orts have been made to obtain information from sources that are believed to be accurate, and to confi rm the accuracy of such information wherever possible, Preqin Ltd. does not make any representation or warranty that the information or opinions contained in Preqin Quarterly Update: Private Equity & Venture Capital, Q1 2018 are accurate, reliable, up-to-date or complete. Although every reasonable eff ort has been made to ensure the accuracy of this publication Preqin Ltd. does not accept any responsibility for any errors or omissions within Preqin Quarterly Update: Private Equity & Venture Capital, Q1 2018 or for any expense or other loss alleged to have arisen in any way with a reader’s use of this publication.

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  • 5

    DOWNLOAD DATA PACK: www.preqin.com/quarterlyupdate

    FUNDRAISING

    In Q1 2018, 180 private equity funds reached a fi nal close, collectively securing $80bn in capital commitments (Fig. 1). Fundraising has slowed in comparison to the previous quarter, when 252 funds raised $102bn. In fact, Q1 2018 saw the smallest amount of capital raised in the fi rst quarter of any year since 2015, when $74bn in aggregate capital was secured by 279 vehicles.

    Both buyout and venture capital totals have experienced similar declines when looking at Q1 fundraising over the past six years: 39 buyout funds reached a fi nal close in Q1 2018, representing a fi ve- year low (Fig. 2). Yet the $52bn in buyout capital is on par with both Q1 2017 and Q1 2016 levels and well above the $39bn fi ve-year historical average (2013-2017).

    As in Q1 2017, venture capital fundraising in Q1 2018 accounted for 14% of aggregate private equity capital raised, although this marked a signifi cant decline in the amount of capital raised and number of funds closed compared to prior years. Similar Q1 totals to the $11bn raised across 92 venture capital vehicles in Q1 2018 have not been seen since Q1 2013, when $7.0bn was raised across 83 venture capital funds (Fig. 3).

    Growth funds and funds of funds in Q1 2018 also saw a drop in fundraising activity: there was a six-percentage-point decline in the proportion of aggregate capital secured by growth funds in Q1 2017 (14%) to Q1 2018 (8%). Funds of funds experienced an even greater slowdown compared to Q1 2017: aggregate capital raised dropped 66% from $13bn in Q1 2017 to $4.6bn in Q1 2018 (Fig. 4).

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    No. of Funds Closed Aggregate Capital Raised ($bn)

    Source: Preqin

    Fig. 1: Global Quarterly Private Equity Fundraising, Q1 2013 - Q1 2018

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    No. of Funds Closed Aggregate Capital Raised ($bn)

    Source: Preqin

    Fig. 2: Q1 Buyout Fundraising, 2013 - 2018

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    140 143 140

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