Investor Activity – 2012 Summary

Investor Activity – 2012 Summary from The Startup Garage
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Private equity fundraising improved in 2012, with the amount of aggregate capital raised by closed funds increasing from $312bn in 2011 to $327bn in 2012, an encouraging sign for the industry. However, the number of funds closed fell from 911 funds in 2011 to 761, indicating limited partnerships (LPs) are now often placing more capital with fewer managers.

According to Preqin (alternative asset industry intelligence firm), the majority (60%) of LPs made new private equity commitments in 2012. However, this is a drop from the 66% of LPs that committed capital to funds in 2011 and suggests many investors still remain cautious in the current financial climate.

Investment Activity by Region

The level of investment activity in 2012 varied among investors in different locations. Certain investors, primarily banks and insurance companies, located in North America and Europe have become increasingly restricted in their investment activities due to stricter regulations, requiring them to re-evaluate their investments in the asset class.

Asia and Rest of World-based investors were the most active, with 67% of the LPs in this region making new commitments. In contrast to tighter regulation in developed markets, LPs based in Asia and Rest of World have seen restrictions on their investments decrease in recent years. Furthermore, investors based in Asia and Rest of World  have become increasingly experienced in investing in private equity and now represent a significant source of capital to fund managers.

Investors Above, At or Below Their Target Allocations

The proportion of LPs below their target allocations to private equity has gradually decreased since 2009. As shown in Fig. 3, almost half (45%) of LPs were below their target allocations to  private equity in December 2009, following the onset of the global fi nancial crisis. This decreased to 28% in December 2012. The vast majority (57%) of LPs are at their target allocations to the asset class and 15% of LPs are over-allocated to private equity.


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About Tyler Jensen

I work with entrepreneurs who are looking to attract investment and get out of the "Garage". I am passionate about helping entrepreneurs start companies that matter. I helped launch over 100 Companies, Non-Profits and Social Enterprises. I consider myself a serial entrepreneur, startup coach & trusted advisor. * Launching New Companies (For Profit, Non-Profit and Social Enterprise) * Expert Business Plan Writer * Extensive Network of Business Relationships focused on Launch & Rapid Growth of New Companies * Startup, Growth, Marketing, Technology, Web, Business Systems * Trusted Advisor to CEO’s & Entrepreneurs * Capital Raising Strategy Development * Startup Team Development The first company I started and sold is VAVi Sport & Social Club which grew to over 25,000 members in six years, was recognized as San Diego’s 30th fastest growing private company in 2006 by the San Diego Business Journal and 32nd fastest in 2007, and sold for over 25X the capital investment.