Following the (Fundraising) Money

Buyout and Growth Equity Fundraising by Size

This week's chart illustrates a clear trend in buyout and growth equity fundraising, with a considerably larger number of sub-$2 billion funds per vintage year compared to larger funds. SMID funds, which primarily target smaller companies, are in a unique position to drive substantial growth through hands-on management and targeted strategies like M&A and operational improvements. Given their smaller scale, these companies can more readily achieve transformational growth, which PE managers are increasingly valuing in today’s market, and which has become less driven by multiple expansion. The emphasis on active engagement and tailored growth plans positions SMID managers as key players in driving returns amid evolving economic conditions. Can your portfolio capture this market segment?

Catch up on the Chart of the Week.

Definitions

Corporate Finance/Buyout: Any PM fund that generally takes control position by buying a company.

Growth Equity – Any PM fund that focuses on providing growth capital through an equity investment.