Private Placement Industry Insights as of May 31, 2023

Friday, June 23rd, 2023 and is filed under Industry Reporting

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

• Twenty-two new private placements were added to investment product education in May, continuing an uptrend from the slowest months early in the year. Real estate offerings remain slower than last year, while other categories such as energy, preferred funds, and hedge funds have seen more funds added this year. On a year-to-date basis, 28% fewer funds have been added and those that have been added are seeking to raise 45% less capital.
• Much of this slowdown continues to be driven by the real estate categories, with all of the real estate segments slower than last year including 1031 exchanges, opportunity zones, and the non-tax-focused offerings.
• As of June 1st, AI Insight by iCapital covers 282 private placements currently raising capital, with an aggregate target raise of $61.2 billion and an aggregate reported raise of $40.7 billion or 67% of target.
• Real estate-related funds, including 1031s, Opportunity Zone funds, and non-1031 real estate LLCs, LPs, and private REITs represent 71% of the total number of funds and 39% 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 there are 13 private equity 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 57% of funds, while growth and growth & income follow at 23% and 18%, respectively.
• The average size of funds currently raising capital is $217.8 million, up from $108.0 million last year although down from recent months. Funds range in size from $2.6 million for a specified 1031 exchange fund to a recently increased $15.5 billion target for a diversified private equity fund.
• 64% of private placements we cover use the 506(b) exemption, 25% use 506(c) and 11% have not yet filed their Form D with the SEC.
• Nine private placements closed to new investors in May and 68 have closed year-to-date. The 54 funds that reported a raise were on the market for an average of 293 days and raised 75% of target on average.

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

 

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Chart and data as of May 31, 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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