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The private equity markets are currently characterized by greater numbers of motivated investors sorting through an ever increasing pool of fund managers seeking their capital. A significant investment of time combined with a coherent and targeted marketing effort is critical to bringing the two sides together for a successful private equity placement.
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Increasing Private Equity Allocations

The rapid growth of the private equity markets in recent years has been fueled by increasing investor allocations to the asset class.  The composition of private equity investors in terms of investor type and geography is evolving.  For instance, European institutional investors play an increasingly important role as investors in the global private equity markets.

Growth in Number of Funds

The pool of funds has expanded significantly to take advantage of the larger amount of capital entering the private equity markets. In spite of a challenging market environment, established fund managers are returning to the markets with new funds under the assumption that now is an ideal time to invest in private equity.

Competition for Investment Capital Remains Strong

Investors target top-quartile returns.  Although investors are allocating more to private equity, they will first target those few funds with established top-quartile track records. As a result, the majority of existing and all new fund managers will face challenges getting the attention of investors.  Nevertheless, the opportunity is there as the supply of top-quartile funds is insufficient to accommodate all investors.

Increased Interest for Smaller Regional Investment Opportunities

In an effort to achieve better portfolio diversification, investors are more willing to look at smaller investment opportunities outside of the investment mainstream.

Length of the Fund Raising Process

Under current market conditions, fundraising will generally take 9-12 months to reach a final close.