One takeaway from the figures is that investors prefer larger funds because they find it easier to perform due diligence amid the pandemic. Fundraising in specific areas has slipped. VC exit values hit a record in Q3, however.

Fresh data paints a mixed picture on the popularity of various private market assets in the third quarter of this month, suggesting that the pandemic hasn’t greatly dented investor enthusiasm and may in some cases have increased it in particular areas.

Quarterly data from Preqin, the research firm tracking the sector, said that a total of 237 private equity funds closed in Q3, the lowest total figure since 2015. However, the total amount of capital raised held up relatively well given the market environment, Preqin said, with the average fund size rising to $536 million. There are 3,968 funds on the road.

Preqin said private equity data suggests that investors want security in larger managers with larger funds, at the cost of smaller or emerging managers. Average fund size has risen by 26 per cent compared with the prior quarter. One reason for the change is that it becomes tougher to conduct due diligence on smaller funds when investors are forced to work remotely because of the virus.

On the venture capital side, total value of VC exits climbed to $118 billion in Q3, a new record. Fueled by a record 189 IPOs – led by Snowflake, Palantir, and Asana – the average exit valuation increased to $216 million from only $100 million a quarter prior. Strikingly, only six investments were written off in the quarter, against a quarterly average of 29 since 2015.

Within private debt, the story was downbeat. The number of funds closing fell in Q3 from the prior quarter. Some 20 funds closed, raising a total of $8.4 billion, sliding from 60 funds closing and $38 billion raised in total. The number of funds in market across private debt strategies is at record levels, however, targeting an aggregate $295 billion.

“In what has been a challenging year for financial markets, the scale of the impact on private equity is becoming clearer with the release of Q3 data. Fundraising efforts remain strong with a record number of funds on the road, albeit with a smaller total capital target than in the past couple of years,” Preqin said. 

The report also noted that while fundraising is challenging in the COVID-19 period, global buyout deal flow has “rebounded significantly” from Q2 levels. The number of deals in Q3 was down by only 0.5 per cent compared with the same quarter last year, a remarkable outcome given the extent of the crisis.