Private Placement Insights as of December 31, 2022

Tuesday, January 17th, 2023 and is filed under Industry Reporting

We recently released our December 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.

• 27 new private placements were added to investment product education in December, slightly higher than what was added in November, but well below the highs from mid-year 2022 when more than 30 funds were added each month. Real estate activity noticeably declined through the year, while some of the other categories, including private equity, recovered from a slower start.
• A total of 326 new funds added investment product education in 2022. While we saw a slowdown in Q4, funds adding education was up 10% year-over-year, and those funds are seeking to raise 44% more capital, on average. The two categories down year-over-year are hedge funds and conservation funds, while all others are above what we experienced in 2021.
• As of January 1st, AI Insight covers 262 private placements currently raising capital, with an aggregate target raise of $41.6 billion and an aggregate reported raise of $20.1 billion or 50% of target.
• Real estate-related funds, including 1031s, Opportunity Zone funds, and non-1031 real estate LLCs, LPs, and private REITs represent 75% of the total number of funds, and 56% of aggregate target. The percentage of target is down recently as larger private equity funds have been added. Additionally, private equity’s share of the target raise is likely much higher. There are 13 private equity funds that do not report a target or a 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 60% of funds, while growth and growth & income follow at 22% and 18%, respectively.
• The average size of funds currently raising capital is $159.2 million, up from $120.1 million at the end of Q3 primarily due to the large private equity fund added in November. Funds range in size from $2.6 million for a specified 1031 exchange fund to the $9.7 billion target for a diversified private equity fund.
• 72% of private placements we cover use the 506(b) exemption, 19% use 506(c) and 9% have not yet filed their Form D with the SEC.
• Forty-one private placements closed to new investors in December and 275 closed in full-year 2022. Funds that closed through the year were on the market for an average of 300 days and the 249 funds reporting, raised 86% 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 December 31, 2022 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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