The explosive growth of open-end funds

Some 39% of all open-end fundraising took place in the last 18 months, with a record 20 funds launched by this half-year alone. We map out the market using data from bfinance.

Click the top right of the presentation to view full screen

It’s official: LPs have opened their minds and their wallets to open-end funds. Over the past year-and-a-half, $55 billion of permanent capital was raised, accounting for 39 percent of all such equity fundraising since inception, data from consultancy bfinance reveals.

In 2018, there were 20 open-end equity funds active in market – 20 have launched this year alone, with permanent capital fundraising in H1 2022 already amounting to 13 percent of all capital amassed since inception.

While 2022 is likely to end up being a record year for closed-end equity fundraising – with several mega-fund closes dominating the headlines – the rise of open-end funds is the year’s sleeper hit, growing steadily in popularity with a total of 36 new entrants coming to market since 2017.

The explosion in supply and demand over the past two years in particular appears to answer in the affirmative a question we posed in our April 2020 Deep Dive on these structures: Is it time to take a closer look at long-term funds?

The new breed of permanent capital vehicles is more adventurous than its predecessors, venturing into new geographies and sectors. “Even infra 2.0 assets, like renewables, can find a home in evergreen funds,” noted Anish Butani, senior director, private markets, at bfinance.

In fact, energy transition-focused open-end funds have attracted 11 new entrants since 2017. Earlier this year, we broke the news Ardian was launching its debut open-end energy transition fund, targeting an initial €1 billion. More recently, we were the first to report that Macquarie Asset Management is gearing up to launch its inaugural evergreen vehicle under the Green Investment Group umbrella, in a sign this trend is not slowing down.

Check out our interactive presentation above, as we use exclusive data from bfinance to map out the burgeoning open-end fund market.