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13 Mar 2024

Will private equity fundraising ignite?

Fund managers have faced extended fundraising timelines due to a recent M&A slowdown, leading to liquidity issues for Limited Partners (LPs). With many expecting longer fund closure times in 2024, will fundraising ignite? Kate Gribbon addresses this question.

Our Private Equity Trends 2024 report shows that 58% of respondents expect their next fund to take more than three months longer to close than its predecessor. General Partners (GPs) are proactively honing investment strategies and safeguarding reputations through cautious international dealings and succession planning to ensure the continuity of successful fundraising. Watch the video to find out more.

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    Will private equity fundraising ignite?

    In the past 12 months, many fund managers have struggled to fundraise, with timelines returning to normal when compared to the turbo-charged raising of recent years. The slowdown in M&A activity has largely driven this, creating a hurdle for GPs who can't return capital to their LPs.

    As a result, Limited Partners (LPs) are generally more illiquid. Our latest Private Equity Trends report found that 58% of respondents expected their next fund to take at least three months longer to close than its predecessor.

    And a further 27% expect it could take longer than six months. We don't expect the fundraising cycle to speed up anytime soon in 2024 but the situation could change if deal volumes accelerate during the second quarter onwards.

    Of course, GPs aren't standing idly by. They're acting on multiple fronts to shift the fundraising pace up a gear. GPs are doubling down with thorough investment theses and meticulous diligence work. As soon as they make an investment, they're already thinking about the exit by warming up potential trade buyers.

    However, when it comes to exploring new opportunities with existing portfolio assets, especially those in international markets they're taking a prudent approach. Much of this action is focused on protecting businesses' and their team's reputations, crucial to raising new funds. Safeguarding a hard-earned reputation is often linked to the question of succession planning. And that's why senior partners and those considering retirement need forward planning preparations in place to hand over a strong reputation for the next generation of GPs.

    

 

Contact us

Kate Gribbon
Kate Gribbon

Head of Financial Sponsor Coverage & Origination

Jonathan Harvey
Jonathan Harvey

Fund Solutions

Helen Lucas
Helen Lucas

Co Head of UK Direct Lending Origination

Kate Gribbon
Kate Gribbon

Head of Financial Sponsor Coverage & Origination

Jonathan Harvey
Jonathan Harvey

Fund Solutions

Helen Lucas
Helen Lucas

Co Head of UK Direct Lending Origination