Luck doesn’t account for much in today’s market, so how did Advent manage to exceed its target in less than nine months, while others toil for more than a year? This was the question that unquote’s editors posed in a story this week that featured analysis of Advent’s latest close, and several other very large funds that reached significant milestones this year.
At under nine months, Advent’s fundraise took just half the time of BC Partners’ EUR 6.5 billion vehicle. It was attributed to its relative and absolute returns, rather than reduction fees of funds structuring. Loyalty of existing LPs was also a contributing factor, as was its ability to retain key personnel and partners.
Here are five trends for other large sized fund closings in 2012
– Unquote’s database recorded 72 closings (interim or final) in the first 11 months of 2012, which is fewer than the same period last year but actually involved a lot more money.
– The first quarter of this year saw a number of sizeable first closes, with Apax Private Equity, IK Investment Partners and Cinven announcing the commitment of EUR 14 billion in a two week period though all have yet to reach a final close.
– Fundraising is taking longer because LPs have to process more data than before, on performance, deals, markets, competition, and key-man or key people.
– Apax, Cinven and Permira worked for more than a year, despite various LP incentives.
– The need to meet with investors is not limited to a GP’s investor relations team.