The Biggest Haul Yet for Private Equity — And Who Got It

Last year brought private equity funds their biggest haul yet.

A total of 202 U.S. private equity funds closed with a combined $301.3 billion in commitments, according to data firm PitchBook. This eclipses the previous post-recession record of $241.7 billion in 2017.

In that year, PitchBook recorded 257 fund closes — meaning the average U.S. fund closed with about $940 million. In 2019, that figure jumped to nearly $1.5 billion, thanks in part to several mega funds which wrapped up during the 12-month period.

Blackstone’s eighth buyout fund secured a record-breaking $26 billion. Other mega funds included Advent International’s ninth global private equity vehicle with $17.5 billion and Vista Equity Partners’ seventh flagship fund, which raised $16 billion.

Mega funds and firms are likely to keep bloating so long as limited partner demand for the asset class persists, according to Wylie Fernyhough, a senior analyst at PitchBook and author of the report. “We’re at this new precipice where we might see more firms targeting $15 billion or more,” he said. “I think it’s not limited to Blackstone,” pointing to the technology-focused Vista Equity Partners Fund VII.

For Blackstone, Fernyhough suggested that fundraising targets could reach “up to 30 or 40 billion dollars.”

[IIDeep Dive:Is a $26 Billion Private Equity Fund the Best Place for Investors?]

As far as deal making, the proliferation of mega funds means that “larger deals are going to be back on the table in a way they haven’t been in a while,” Fernyhough said, citing KKR’s reported discussions with Walgreens Boots Alliance about taking the giant pharmacy company private.

“We’ve seen some concern that performance might have to come down just because it’s difficult to find opportunities,” he added. “Some GPs may forgo investing in a new company and choose to reinvest in existing portfolio companies.”

Other $10-billion-plus private equity funds closed in 2019 included Thoma Bravo’s thirteenth flagship fund, Leonard Green & Partners’ Green Equity Investors VIII, and TPG Capital’s eighth buyout fund, which raised a total of $36.1 billion combined. Notably, all of these funds run buyout strategies. But other approaches broke into the top 10, as well.

For example, Dyal Capital Partners sucked up $9 billion for its fourth fund, which will buy stakes in other alternative asset management firms. Business is booming, after all.