Hey all - given the tough fundraising market from 2023 till now, everyone’s heard of all the fundraising misses over the past twelve months. However, would love to hear a bit more about everyone’s insights / thoughts on firms that have had the strongest fundraising momentum through these tough times or best positioned in the near-term.
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Not to take away anything from the big fund closes in the first half of 2023 (Arcline III, TA XV, CD&R XII, etc), but tbh the funds that closed in 1H23 or even in the first 9 months weren't that affected, as most of them secured checks from their largest LPs quite far in advance before the fundraising slowdown.
Besides the usual MF names (H&F, Advent, etc), I think the some impressive fundraising trajectory standouts are H.I.G., CVC, and Veritas.
H.I.G basically doubled their MM fund from Fund III to Fund IV with a total close of ~$6B and they're now in the market targeting $5B for Advantage II (~66% larger than Advantage I's close), which is ambitious given that Advantage I hasn't really realized any investments yet, but given it's H.I.G., they're more than likely to hit that target as well. If they can show that their strategy scales well with size through MM IV's performance, I wouldn't be surprised if they hit the market in a couple of years going for a significantly bigger MM V.
CVC's obviously had great performance and fundraising trajectory with their flagship fund, but I think what CVC's been able to do much better than other "small" platform MFs is to scale their non-core strategies just as impressively as how they've scaled their core strategies. In a tough Asia fundraising environment they just managed to close a $6.8B Asia fund, putting them as one of the top new Asia-focused funds.
Veritas is Veritas - their LPs (rightfully) love them, they've shown their strategy scales well with size, and they'll without a doubt blow through whatever their target is for their next fund that is rumored to have kicked off fundraising.
In the UMM and MM space, would say that NMC, Patient Square, HIG, LGP, One Rock, Greenbriar, KPS, Arcline, and Parthenon seem to have great future outlooks. All have great historical performance and fundraising track record (with the exception of Patient Square) with differentiated strategies (eg. HIG and One Rock -> value, KPS -> turnaround), deep industry knowledge (eg. Arcline and Greenbriar -> Industrials and A&D, Patient Square -> HC, Parthenon -> Tech), or sheer pedigree with LPs (LGP, NMC)
Arcline's absolutely going to kill it - they've raised a significantly upsized Fund III and they're going to have great returns from Fund I to point to when they raise Fund IV.
Obviously it's much easier for smaller firms and new firms with pedigree to scale their fund sizes relatively rapidly, but would say that on the smaller MM side Gemspring, Percheron, Baypine, Brighton Park (Growth), Stellex, Knox Lane, and Nautic have stood out to me.
That being said, a lot of these funds rode the fundraising wave pre-2H2023, so it's hard to separate which firms rode the market vs which ones will last in a tougher environment. Only time will tell.
Arlington Capital Partners really seems like it's on the same track Veritas was. Focused on A&D, gov services, and HC, with a very lean team, stuffy culture, and phenomenal fundraising track record (latest fund closed at $3.8B, more than doubling the previous fund size)
Yeah, they've had their bumps along the road over the past few decades but it seems like over the past 10 years they've really found their groove.
On the MF side, I feel like EQT is underrated and is well positioned. Returns seem to be good, above average compared to similar MFs from public filings. Diversified platform with strong non-flagship buyout strategies, good fundraising, and in an era when a lot of other MFs missed their latest flagship fundraise target EQT seems like they'll hit the hard cap (albeit it's taken them some time to do so).
Few $15B+ secondary funds in the last 12 months
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