Fundraising and private equity fund performance in the US during H1 2023

Megafunds 

Whilst the middle market has been thriving, there is also a lot to be said about the megafunds and their activities in the first half of the year. 

Over the past two years, megafunds have accounted for 47.2% of total fundraising. That share dropped to 41.7% through the first half of 2023. According to Pitchbook, this downtrend is likely to reverse in the second half of the year as numerous large funds that have been kept open by mega sponsors are poised to close.

Megafunds like Blackstone, Carlyle, TPG, CDR Vista and Warburg all have funds in the market that have been fundraising for the last year or so and have collected close to $100 billion in investor capital. However, whilst these funds are raising capital, it is flowing in at a significantly slower pace than it has during the past two years. Moreover, the likes of Carlyle and Blackstone have reduced their outlooks for performance. The combination of these two factors has resulted in the tempering of expectations of sponsors.   

Middle market funds 

Alternative sources of fundraising 

Traditional limited partners (LPs) in the US have remained constrained in their PE allocations, prompting GPs to explore alternative geographics, like Asia and the Middle East. Increasingly, GPs are also seeing these major LPs from these regions seek out co-investment opportunities on specific investments, allowing GPs to tap another funding source when financing is tight. Pitchbook cites French PE firm Ardian as an example of this strategy in action. 

Fund performance

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