Private Placement Industry Insights as of September 30, 2023

Wednesday, October 11th, 2023 and is filed under Industry Reporting

We recently released our September 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.

• Sixteen new private placements were added to investment product training in September, continuing an uptrend from the low in July but still well below the regular pace of 25-30 per month.  Most of the slowdown is due to continued weakness in the real estate segment, a historically large component of the platform. 1031 exchange activity remains stagnant and even the smaller private real estate deals have slowed. Despite growth in energy and hedge funds, overall new fund activity on the platform is well below last year. On a year-to-date basis 37% fewer funds have been added and those that have been added are seeking to raise 60% less capital.
• While activity has slowed, we have seen continued additions of funds providing access to private equity and hedge fund strategies that were either previously not available to individual investors or available to investors overseas. These feeder or access funds adding education is a positive sign for the private markets industry – investors who make informed decisions stay invested longer. Additionally, we continue to see new sponsors adding education for their funds, including four new sponsors added this month.
• As of October 1st, AI Insight by iCapital covers 295 private placements currently raising capital, with an aggregate target raise of $50 billion and an aggregate reported raise of $29 billion or 58% of target.
• The average size of funds currently raising capital is $169 million. Funds range in size from $2.6 million for a specified 1031 exchange to a recently increased $13 billion AUM for a diversified private equity and debt fund.
• Real estate-related funds, including 1031s, Opportunity Zone funds, and non-1031 real estate LLCs, LPs, and private REITs represent 70% of the total number of funds, and 52% 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 1031 exchange activity. Additionally, private equity’s share of the target raise is likely much higher because, despite the closing of the large private equity fund, there are 13 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 58% of funds, while growth and growth and income follow at 21% and 18%, respectively.
• 62% of private placements we cover use the 506(b) exemption, 29% use 506(c) and 9% have not yet filed their Form D with the SEC.
• Sixteen private placements closed to new investors in September and 128 have closed year-to-date. The 109 funds that reported a raise at close were on the market for an average of 307 days and raised 96% of target on average.

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

 

Access the full Private Placements report and other hard-to-find alts data

AI Insight’s Industry Reporting capabilities help you review alternative investment trends and historical market data for Private Placements, Non-Traded REITs, Non-Traded BDCs and Interval Funds. Receive up to 22 extensive reports per year to help broaden your alternative investment reviews.

Log in or subscribe to AI Insight to further research, sort, compare, and analyze all of the private and public funds in our coverage universe. See who’s new in the industry and what trends are impacting the alts space.

_________________________________

Chart and data as of September 30, 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.

On a subscription basis, AI Insight provides informational resources and training to financial professionals regarding alternative investment products and offerings. AI Insight is not affiliated with any issuer of such investments or associated in any manner with any offer or sale of such investments. The information above does not constitute an offer to sell any securities or represent an express or implied opinion on or endorsement of any specific alternative investment opportunity, offering or issuer. This report may not be shared, reproduced, duplicated, copied, sold, traded, resold or exploited for any purpose.

The material herein has been provided to you for informational purposes only by Institutional Capital Network, Inc. (“iCapital”). This material is the property of iCapital and may not be shared without the written permission of iCapital. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of iCapital. This material is provided for informational purposes only and is not intended as, and may not be relied on in any manner as legal, tax or investment advice, a recommendation, or as an offer to sell, a solicitation of an offer to purchase or a recommendation of any interest in any fund or security offered by iCapital. You should consult your personal accounting, tax and legal advisors to understand the implications of any investment specific to your personal financial situation. This material does not intend to address the financial objectives, situation or specific needs of any individual investor. Alternative investments are complex, speculative investment vehicles and are not suitable for all investors.

This material may contain forward looking statements. Forward looking statements include, but are not limited to assumptions, estimates, projections, opinions, models and hypothetical performance analysis. Forward looking statements involve significant elements of subjective judgments and analyses and changes thereto and/or consideration of different or additional factors could have a material impact on the results indicated. Due to various risks and uncertainties, actual results may vary materially from the results contained herein. The information contained herein is an opinion only, as of the date indicated, and should not be relied upon as the only important information available. Any prediction, projection or forecast on the economy, stock market, bond market or the economic trends of the markets is not necessarily indicative of the future or likely performance. The information contained herein is subject to change, incomplete, and may include information and/or data obtained from third party sources that iCapital believes, but does not guarantee, to be accurate. iCapital considers this third-party data reliable, but does not represent that it is accurate, complete and/or up to date, and it should not be relied on as such. iCapital makes no representation as to the accuracy or completeness of this material and accepts no liability for losses arising from the use of the material presented. No representation or warranty is made by iCapital as to the reasonableness or completeness of such forward looking statements or to any other financial information contained herein. The manner of circulation and distribution of this document may be restricted by law or regulation in certain countries, including the U.S. This document is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, including the U.S., where such distribution, publication, availability or use would be contrary to law or regulation or which would subject iCapital to any registration or licensing requirement within such jurisdiction not currently met within such jurisdiction. Persons into whose possession this document may come are required to inform themselves of, and to observe, such restrictions. It is the responsibility of the recipient of this document to comply with all relevant laws and regulations.

Alternative investment products and services may be offered through iCapital Securities, LLC. Structured investment products and services may be offered through Axio Financial LLC and/or SIMON Markets LLC. iCapital Securities LLC, Axio Financial LLC, and SIMON Markets LLC are each a registered broker/dealer, member FINRA and SIPC, and an affiliate of Institutional Capital Network, Inc. (“iCapital”). These registrations and memberships in no way imply that the SEC, FINRA or SIPC have endorsed the entities, products or services discussed herein. iCapital and iCapital Network are registered trademarks of Institutional Capital Network, Inc. Additional information is available upon request.

© 2023 iCapital, Inc. All Rights Reserved.