![]() This means that middle market funds, and to a greater extent, lower-middle market and emerging managers face an uphill battle compared to their larger peers. In more volatile markets, LPs tend to lean into what is familiar as it is easier allocating to a well-established GP. GPs that have long standing relationships with allocators are in a better position to raise capital in this environment given allocators tend to prioritize re-ups. 2 This trend intensified as the fundraising market was crowded and LPs continued to commit capital to familiar, large market funds. 1 In our recent Private Markets Semi-Annual Update, we noted that middle-market funds raising more than $1 billion accounted for nearly 80 percent of total capital raised during 2021 and mega funds, larger than $5 billion, accounted for about 50 percent of the capital raised. during the first half of 2022 and is on pace to match 2021 dollars raised. Even so, fundraising and deal activity remained healthy by historical standards.Ī total of 191 funds raised approximately $176 billion in the U.S. ![]() Private markets, while lagged, are correlated to public markets and this was reflected in performance across buyout, growth equity and venture capital. The risks were known – high levels of inflation, geopolitical tensions, the Fed increasing interest rates – and public markets reacted accordingly by drawing down. Private markets were coming off a phenomenal 2021 with respect to performance, fundraising and deal-volume. The first six months of 2022 were challenging for investors broadly, especially in relation to last year. A total of 18 take-private deals have closed in 2022, with $58.6 billion in aggregate deal value. GPs were increasingly active in take-privates, as publicly traded companies were under pressure.This represented 21 percent of all private markets fundraising through June, which is nearly double the average over the last 10 years. Infrastructure-focused funds raised over $90 billion in the first six months of 2022.The fundraising environment was competitive and both middle market and emerging managers faced headwinds as allocators prioritized long-standing relationships with larger, more established firms.While longer term performance remained strong, one-year return calculations have moderated across all private equity strategies.Private Markets Semi-Annual Update – Summer 2022
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