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The median time that European private equity funds are taking to reach a final close is growing as more capital gravitates toward a handful of large, established firms.

In the first half of this year, the median time between fund launch and the final close for vehicles that closed was 15.8 months, according to PitchBook data.  The median for the whole of 2022 was 12.5 months. If the trend continues for the rest of year, it could be the longest median fundraising time for any year since 2013.   
Record inflation, soaring interest rates and a gloomy economic outlook have made fundraising harder for many managers. In these conditions, LPs invested €24.1 billion in mega-funds—those greater than €5 billion—in H1 this year, according to PitchBook's Q2 2023 European PE Breakdown. This represents almost half of the total €48 billion raised during the time period. At this pace, the total capital raised this year is likely to outstrip 2022's €68.2 billion, but at the expense of smaller, emerging managers whose funds of less than €250 million are seeing a lower run rate of fundraising, according to the report.

Last month CVC Capital Partners IX closed on €26 billion after just six months in the market. This record fund further underscores the increasing bifurcation of a PE market in which well-established GPs find it far easier to raise capital, using their existing LP base, than do their emerging manager counterparts.

The report added that PE fundraising might be buoyed by a continued public equities recovery as private markets tend to lag these rallies by a few months. This, coupled with an improving macro environment, may make fundraising easier across the board. Analysts highlight that in the event this recovery does not continue, the larger, established firms are in a far better position to weather the storm than their smaller, emerging counterparts.

Featured image by InnaVlasova/Getty 
 

This article originally appeared on PitchBook News