Private Placement Insights as of September 30, 2022

Thursday, October 13th, 2022 and is filed under AI Insight News

We recently released our September 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.

• 22 new private placements were added to our coverage in September, slower than prior months primarily due to fewer 1031 exchanges added. However, we have added more funds in all categories other than energy and hedge funds this year compared to last, although activity is ramping up in the hedge fund category with new funds coming soon. Real estate funds still lead in terms of funds added and raise targets. Non-tax focused real estate LLCs, LPs, and private REITs are up 96% from a year ago and are seeking to raise 489% more capital. 1031 exchange additions have slowed recently although they are still up year-over-year, while we continue to see slow but steady activity in Opportunity Zone fund additions.
• Overall, on a year-over-year basis, we have added more funds than last year (+26%), and these funds are targeting a larger amount of capital (+101%). We have also added more than 30 new sponsor relationships across the categories. The increase in volume is indicative of the continued growth in alternative investment options for high-net-worth investors, as well as a focus on education within the space.
• As of October 1st, AI Insight covers 255 private placements currently raising capital, with an aggregate target raise of $30.9 billion and an aggregate reported raise of $10.0 billion or 32% of target.
• Real estate-related funds, including 1031s, Opportunity Zone funds, and non-1031 real estate LLCs, LPs, and private REITs represent the largest component of our private placement coverage at 71% of funds and 72% of target raise. Private equity/debt funds represent 15% of funds and 17% of target raise, although this does include 12 private market feeder funds that do not specify an offering target.
• In terms of coverage by general objective, income is the largest component at 57% of funds, while growth and growth & income follow at 25% and 18%, respectively.
• The average size of funds currently raising capital is $121.6 million, ranging from $3.9 million for a specified Opportunity Zone fund to $2.5 billion for a private REIT focused on single-family housing.
• 72% of private placements we cover use the 506(b) exemption, 18% use 506(c) and 10% have not yet filed their Form D with the SEC.
• 27 private placements closed to new investors in September and 203 have closed year-to-date. Funds that closed this year have been on the market for an average of 275 days and the 188 funds reporting raised 89% 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 September, 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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