Private Placement Industry Insights as of November 30, 2023

Thursday, December 14th, 2023 and is filed under Industry Reporting

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

  • Fourteen new private placements were added to investment product training in November, fewer than last month but more than the trough in July. We continue to see weaker activity in the real estate segment, which has historically been a large component of the platform. 1031 exchange activity remains stagnant and even the smaller private real estate deals have slowed. Despite growth in energy, hedge funds, and preferred offerings, overall new fund activity on the platform is well below last year. On a year-to-date basis 37% fewer funds have been added and those that have been added are seeking to raise 57% less capital.
  • While activity has slowed, we have seen continued additions of funds providing access to private equity and hedge fund strategies that were either previously not available to individual investors or available to investors overseas. These feeder or access funds adding education is a positive sign for the private markets industry – investors who make informed decisions stay invested longer. Additionally, we continue to see new sponsors adding education for their funds, including two new sponsors added this month.
  • As of December 1st, AI Insight by iCapital covers 294 private placements currently raising capital, with an aggregate target raise of $52 billion and an aggregate reported raise of $35 billion or 67% of target.
  • The average size of funds currently raising capital is $177 million. Funds range in size from $3.8 million for a real estate property improvement fund to a recently increased $13.6 billion AUM for a diversified private equity and debt fund.
  • Real estate-related funds, including 1031s, Opportunity Zone funds, and non-1031 real estate LLCs, LPs, and private REITs represent 69% of the total number of funds, and 49% of aggregate target. The percentage of target is down significantly as larger private equity and hedge funds have been added along with the slowdown in real estate. Additionally, private equity’s share of the target raise is likely much higher because, despite the closing of the large private equity fund, there are 12 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 55% of funds, while growth and growth and income follow at 22% and 19%, respectively.
  • 59% of private placements we cover use the 506(b) exemption, 32% use 506(c) and 9% have not yet filed their Form D with the SEC.
  • Ten private placements closed to new investors in November and 162 have closed year-to-date. The 129 funds that reported a raise at close were on the market for an average of 318 days and raised 91% of target on average.
  • Pitchbook recently released its Q2 2023 Global Fund Performance Report, with preliminary private market returns for Q2. Overall private capital posted a quarterly return of 2.1% in Q2, down from 3.3% in Q1 but not returning to negative territory like we saw in 2022. Smaller venture capital deals, opportunistic real estate, and distressed private debt dragged the overall return down, although it should be noted that the index returns are based on cash flow and net asset data, which tends to be less predictable in these higher risk categories. Buyout and real assets strategies lead on the upside.

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


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Chart and data as of November 30, 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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