A summary on the Q1 2024 Global Market Fundraising

According to The Q1 2024 Global Private Market Fundraising Report by Pitchbook we can see key trends in the private market, with a total of $295 billion raised across 521 funds. Although this represents a slight decrease from the $298 billion raised in Q1 2023, larger funds over $1 billion continue to dominate, accounting for 81.2% of the capital. The report showcases a mixed landscape, with private equity thriving while venture capital and real estate face declines.

Private Equity and Secondaries Surge

Private equity remains the cornerstone of the fundraising landscape, leading the way with $156 billion raised across 110 funds. This reinforces the asset class as a top choice for institutional investors. Many large PE funds exceeded their fundraising targets despite a tough exit environment, while secondary markets gained traction, raising $35 billion, or 11.8% of the total, reflecting growing demand for liquidity solutions. The rising popularity of continuation funds also signifies a new trend, allowing GPs to extend the lifecycle of valuable assets without requiring a full exit. LPs, in turn, are keen on these funds as they provide liquidity while maintaining exposure to high-performing assets.

Venture Capital Struggles

Venture capital faced headwinds, raising only $29.8 billion—a 44.2% decline YoY, marking one of its slowest quarters since 2015. The report attributes this downturn to high interest rates and slow exit activity. Investors have become increasingly cautious about funding earlier-stage startups, with many focusing on existing portfolios rather than deploying new capital. The tech sector, particularly in emerging technologies like AI and biotech, still offers bright spots, but overall enthusiasm is subdued.

Real Estate and Private Debt Face Uncertainty

The real estate sector also experienced a slowdown, raising only $16.1 billion. Ongoing uncertainty in commercial real estate, particularly in the office and retail segments, has caused investors to hesitate. The shift in demand due to remote work and evolving consumer behavior has led to caution among LPs, and funds focused on multifamily and office spaces are taking longer to close. Private debt, another traditionally strong asset class, raised $30.4 billion, down significantly from $56 billion in Q1 2023. While larger private debt managers continue to attract capital, LPs are showing preference for safer, more established funds amid rising interest rates.

Real Assets Provide Stability

Despite volatility in other sectors, real assets saw more consistent performance, raising $24 billion. Investors continue to favor core and core-plus infrastructure investments due to their stable, inflation-resistant characteristics. With growing global demand for infrastructure, particularly in renewable energy, transportation, and digital infrastructure, this sector is expected to maintain steady growth.

Shifts in Fundraising Dynamics

One notable shift in Q1 2024 is the lengthening of fundraising timelines across all asset classes. Investors are exercising more caution and taking longer to commit capital, which reflects a heightened focus on due diligence and transparency. This trend is particularly impactful for emerging managers, who are facing more difficulty securing commitments as LPs prioritize experienced managers with strong track records.

Key Takeaways

Private equity and secondaries remain strong performers, accounting for a large portion of total fundraising. Continuation funds are gaining popularity as an alternative to traditional exits. Venture capital is experiencing a sharp decline due to high interest rates and low exit activity, with LPs showing a preference for established managers. Real estate and private debt have struggled in Q1 2024, reflecting uncertainty in specific market segments, such as commercial properties and debt-driven investments. Real assets provide a stable alternative for investors seeking inflation-resistant opportunities, especially in infrastructure.

Looking Ahead to 2024

As the private market continues to navigate economic challenges, the second half of 2024 is expected to see ongoing strength in private equity and real assets, while sectors like venture capital may struggle to regain momentum. Emerging managers will need to refine their strategies and demonstrate more robust due diligence to attract capital in this increasingly competitive environment. For a detailed look at the numbers and deeper insights, access the full PitchBook Q1 2024 Global Private Market Fundraising Report here.