European Megafunds

(from Pitchbook see: “Time to Close” & the Importance of IR teams)

Author: Tshepo Magagane – Executive

Are they as important as Investing Teams – an argument to be made there?!?

Specifically, time between funds has decreased, going from a median of 5.4 years for the 2013-2015 period to 3.3 years for the 2022-2024 period for megafunds; and from 5.5 years to 3.7 years for non-megafunds. Step-ups for megafunds peaked at a median of 1.8x in the 2019-2021 period before dropping to 1.6x in 2022-2024; while step-ups for non-megafunds have remained stable at 1.4x since the 2016-2018 period.

Time to close has increased in the 2022-2024 period as compared with the 2019 2021 period, going from nine months to 15 months for megafunds and 13 months to 16 months for non-megafunds. This is a function of megafunds often having large, specialised investor relation teams. However, recently, lower capital availability has affected both megafunds and non-megafunds by increasing timelines to close funds.