Sixty three percent of funds using a placement agent exceed their target size, Preqin study finds.
by Nicholas Neveling, Real Deals.
Demand for placement agents is on the up with new Preqin figures showing that firms with placement agents are more likely to close than those without.
Preqin said a record proportion of fund managers (54 per cent), across all alternative asset classes, that closed a fund this year had employed a placement agent to advise on fundraising. If this momentum continues through the rest of the year, 2016 will be the fourth successive year in which the proportion of funds using placement agents has increased, rising from 44 per cent for funds closed in 2012.
The private markets data provider also found that private capital funds raised since the start of 2015, including private equity, real estate, private debt, infrastructure and natural resources, achieved better results when a placement agent was used.
Preqin said sixty three percent of these funds exceeded their target size compared to just 41 per cent of experienced firms that did not use a placement agent.
Placement agents also helped first-time fund managers to surpass their target size as 40 per cent of first-time funds which did use placement agents exceeded their stated aim, compared to just 29 per cent of funds which did not.
“In such a competitive fundraising environment, the added expertise and assistance that these service providers can offer could make the difference in holding a successful fundraise or not,” Preqin’s head of private equity products, Christopher Elvin, said.
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