Private Placement Industry Insights as of February 28, 2023

Thursday, March 16th, 2023 and is filed under Industry Reporting

We recently released our February Private Placement Insights report. See the highlights from the report below, or if you are an AI Insight subscriber, log in now to see the entire report.

  • 18 new private placements added investment product education in February, higher than January but still well below 2022 monthly averages. On a year-to-date basis, 13% fewer funds have added education and those that have added are seeking to raise 45% less capital.
  • Much of this slowdown is driven by the real estate categories, specifically 1031 exchanges and non-tax focused offerings. The only real estate category experiencing growth is the Opportunity Zone segment. All other categories are either on par with or well above last year’s levels.
  • As of March 1st, AI Insight by iCapital covers 261 private placements currently raising capital, with an aggregate target raise of $42.9 billion and an aggregate reported raise of $22.0 billion or 51% of target.
  • Real estate-related funds, including 1031s, Opportunity Zone funds, and non-1031 real estate LLCs, LPs, and private REITs represent 74% of the total number of funds, and 54% of aggregate target. The percentage of target is down recently as larger private equity and hedge funds have been added. Additionally, private equity’s share of the target raise is likely much higher because there are 12 private equity funds that do not report a target or capital raise, as they are seeking instead to raise a percentage of a larger, institutional fund rather than a specific dollar amount.
  • In terms of coverage by general objective, income has been and remains the largest component at 57% of funds, while growth and growth & income follow at 23% and 20%, respectively.
  • The average size of funds currently raising capital is $165.1 million, up from $108.0 million last year and continuing a trend towards larger offerings. Funds range in size from $2.6 million for a specified 1031 exchange fund to the $9.7 billion target for a diversified private equity fund.
  • 70% of private placements we cover use the 506(b) exemption, 20% use 506(c) and 10% have not yet filed their Form D with the SEC.
  • Nineteen private placements closed to new investors in February and 37 have closed year-to-date. The 34 funds that reported a raise were on the market for an average of 295 days and raised 69% of target on average.

For illustrative purposes only. Past performance is not indicative of future results.

 

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Chart and data as of February 28, 2023, based on programs activated on the AI Insight platform as of this date.

Activated means the program and education module are live on the AI Insight platform. Subscribers can view and download data for the program and access the respective education module.

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