Private Placement Industry Insights as of July 31, 2021

Thursday, August 12th, 2021 and is filed under Industry Reporting

We recently released our July Private Placement Insights report. See the highlights from the report below, or if you are a Premium Reporting subscriber, log in now to see the entire report. If you don’t have access, you can request a free trial.

• May and June were big months in terms of new funds added to our coverage. July is no exception and is a record, with 29 new funds added. 1031 exchanges, hedge funds, and private equity/debt offerings led the way and we have seen a ramp up in non-tax focused real estate offerings as well. Energy and Opportunity Zones are slow this year, while preferred and conservation offerings are flat. President Biden’s proposal to reduce the deferral of gains under section 1031 to a maximum of $500,000, for those transactions completed in tax years prior to December 31, 2021, may be contributing to an increase in this category prior to any changes, something that we continue to watch as it could have an impact on future fund formation.
• 150 new funds have been added in 2021 making this a strong year and putting us well ahead in terms of new fund coverage (+69%) and aggregate target raise (+83%).
• As of August 1st, AI Insight covers 204 private placements currently raising capital, with an aggregate target raise of $19.3 billion and an aggregate reported raise of $7.8 billion or 40% of target.
• Real estate-related funds, including 1031s, Opportunity Zones, and non-1031 real estate LLCs and LPs represent the largest component of our private placement coverage, at 70% of funds and 62% of target raise. Private equity/debt funds represent a relatively small amount of our coverage in terms of the number of funds at only 16% but represents 27% of target raise even with several funds in the category not reporting a target.
• In terms of our coverage by general objective, income is the largest component at 54% of funds, while growth and growth & income follow at 27% and 19%, respectively.
• The average size of the funds currently raising capital is $94.8 million, ranging from $1.8 million for a specified private equity fund to $1.1 billion for a larger blind pool private equity fund. Seven funds do not report a target or current capital raise.
• 82% of private placements we cover use the 506(b) exemption, 14% use 506(c) and 4% have not yet filed their Form D with the SEC.
• 18 private placements closed to new investors in July and 118 have closed in 2021. Funds that closed this year have been on the market for an average of 339 days. The funds that reported, raised 93% of target. 84% met or exceeded their target and only six funds that missed their target raised less than half of target.
• ON DECK: there are six new private placements coming soon.

For illustrative purposes only.

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Chart and data as of July 31, 2021, based on programs activated on the AI Insight platform as of this date.

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