Private-equity firms are on the hunt for funding, turning up the competition during market and economic uncertainty and an overall lean time for new deals.
“Right now, it’s just taking longer to raise funds,” Josh Zweig, co-head of U.S. private-equity research at advisory firm Cambridge Associates, told the Wall Street Journal (WSJ) on Monday (July 18).
Zweig added that the fundraising heyday of the past three years, driven by outsized funds and innovative strategies, is now going in the opposite direction.
According to London investment data firm Preqin, 2,845 funds are looking to raise over $1 trillion altogether, WSJ reported. That’s an increase of more than 60% in the number of funds and in the amount of capital being sought.
See also: Crypto’s Decline Drags Down Venture Capital Funding
Funding for private cryptocurrency companies is also down, PYMNTS reported earlier this month, with $6.76 billion in capital added by venture capitalists for the three months ending in June, the lowest level in a year.
New funds from Blackstone, Hellman & Friedman and Apollo Global Management are among at least nine major funds with targets of $20 billion or more responsible for more than $216 billion of the total being sought, the WSJ reported.
Read more: Motive Partners Closes $2.5B Flagship Capital Fund
Brand recognition is going a long way when it comes to picking up new funds, as is the size of the firms, with bigger names grabbing a larger share of the funding pie.
“Everyone is nervous and concerned about the war [in Ukraine], the stock market going down, inflation…but the big names are still crushing it,” Jonathan Karen, a fund formation lawyer at Simpson Thacher & Bartlett LLP, whose clients include firms such as Blackstone and Silver Lake, told the WSJ.
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