Funding Development: Leading private equity fundraising updates

Funding Development: Leading private equity fundraising updates

In the world of private equity, a growing demand for liquidity has prompted a shift in approach, with fund managers tailoring their strategies and structures to accommodate this need. This evolution is exemplified by several recent fund launches and solutions, such as Apollo Global Management's S3 Equity and Hybrid Solutions, Morgan Stanley Investment Management's North Haven Private Assets Fund, Corsair Capital's Continuation Vehicle and Secondary Fund, Mérieux Equity Partners' Mérieux Innovation 2 (MI2) Fund, and Provectus SEE Fund II.

Apollo's S3 Equity and Hybrid Solutions aim to offer liquidity and flexible capital structures, blending equity and credit elements to cater to investors' demands for cash flow and risk management. North Haven Private Assets Fund, Morgan Stanley's first evergreen private equity fund, specialises in private asset strategies with enhanced liquidity profiles, addressing the evolving needs of institutional investors.

Corsair Capital's continuation vehicle and secondary fund align with the broader trend of using continuation vehicles to extend holding period horizons and provide liquidity options for existing Limited Partners (LPs), while attracting new capital via secondary fund structures. MI2, managed by Mérieux Equity Partners, reflects a strategic focus on sectors and innovation-driven companies, likely responding to LP demand for differentiated growth strategies while factoring liquidity and exit challenges.

Provectus SEE Fund II, a €200m private equity vehicle managed by Provectus Capital Partners (PCP), focuses on providing equity and equity-related capital to small and medium-sized enterprises across Southeast Europe. The fund's geographical focus includes Croatia, Slovenia, Romania, and Bulgaria, with potential investments in Albania, Bosnia and Herzegovina, Greece, Kosovo, Montenegro, North Macedonia, and Serbia.

MI2, a €150m fund, has secured nearly 50% of its target and has announced its first deployment, a €6m investment in Spanish diagnostics firm deepull. Initial investments by MI2 will typically be around €6m, with a target to back approximately 15 EU-based ventures in industries such as diagnostics, therapeutics, medtech, and pharma services.

The Corsair Riva, L.P. continuation fund was fully capitalised by a group of new and existing LPs, led by secondaries specialist Coller Capital. The European Bank for Reconstruction and Development (EBRD) is also considering a €25m equity investment in Provectus SEE Fund II.

This collection of funds and vehicles underscores a significant shift in the private equity industry. With conventional liquidity events like Initial Public Offerings (IPOs) and sales remaining subdued, managers are increasingly relying on structured liquidity solutions and longer-term capital commitments. The North Haven Private Assets Fund, structured for individual investors seeking private equity exposure with enhanced liquidity, is an example of this trend.

In the first half of 2025, fundraising has slowed to its weakest levels since 2020, with Q1 2025 private equity fundraising down $21.7 billion compared to Q1 2024. This cautious LP behaviour amid liquidity constraints and allocation challenges caused by the denominator effect has extended the average time to close new funds to about 18 months. However, managers with the capability to provide flexible and diverse liquidity options are attracting capital amidst constrained traditional fundraising.

References: [1] Private Equity International, 2025. "Private Equity Fundraising Slows Amid Liquidity Constraints." [Online] Available: https://www.peimedia.com/news/private-equity-fundraising-slows-amid-liquidity-constraints/ [Accessed 15 May 2025]. [2] Preqin, 2025. "Secondaries Market Booms as LPs Seek Liquidity." [Online] Available: https://www.preqin.com/news/secondaries-market-booms-as-lps-seek-liquidity/ [Accessed 15 May 2025]. [3] Morgan Stanley, 2025. "Morgan Stanley Investment Management Introduces North Haven Private Assets Fund." [Online] Available: https://www.morganstanley.com/im/institutional/private-markets/north-haven-private-assets.html [Accessed 15 May 2025].

1. The S3 Equity and Hybrid Solutions by Apollo Global Management offer liquidity and flexible capital structures, blending equity and credit elements, catering to investors' demands for cash flow and risk management.
2. Morgan Stanley Investment Management's North Haven Private Assets Fund, their first evergreen private equity fund, focuses on private asset strategies with enhanced liquidity profiles, addressing the evolving needs of institutional investors.
3. Corsair Capital's continuation vehicle and secondary fund, aligning with the broader trend, offer liquidity options for existing Limited Partners (LPs) and attract new capital via secondary fund structures.
4. MI2, managed by Mérieux Equity Partners, addresses LP demand for differentiated growth strategies while factoring liquidity and exit challenges, with initial investments typically around €6m and a target to back approximately 15 EU-based ventures.
5. The Corsair Riva, L.P. continuation fund was fully capitalized by a group of new and existing LPs, led by secondaries specialist Coller Capital, demonstrating a response to the growing demand for liquidity in private equity.
6. Provectus SEE Fund II, with a geographical focus on Southeastern Europe, aims to provide equity and equity-related capital to small and medium-sized enterprises, as the European Bank for Reconstruction and Development (EBRD) considers a €25m equity investment.
7. In the current market, managers who can provide flexible and diverse liquidity options are attracting capital amidst constrained traditional fundraising, with fundraising in the first half of 2025 slowing to its weakest levels since 2020, extending the average time to close new funds to about 18 months.

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