The number of private equity funds that closed in 2022 dropped year over year as investors took a step back amid challenging market conditions.

A total of 2,024 private equity funds held their final close in 2022, down 45.9% from the 3,743 vehicles that closed in 2021, S&P Global Market Intelligence data shows.

The amount of capital raised declined 10.8% to $922.94 billion from the more than $1.034 trillion recorded the previous year.

Unfavorable market conditions such as high inflation, rising interest rates and slowing growth prompted private equity firms to extend their fundraising timelines.

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The denominator effect caused by public market volatility is also affecting the commitment sizes of limited partners, or institutions that provide capital to private equity funds, and forcing firms to look for new investors such as private wealth clients, retail investors and family offices, said Ropes & Gray, a law firm for private capital clients.

4th-quarter numbers

In the fourth quarter of 2022, the number of funds that made their final close slipped to 347 from 1,010 vehicles in the last three months of 2021.

The amount of capital raised by the closed funds in the October-December 2022 period stood at $181.93 billion, down from $234.10 billion year over year.

Biggest funds

Advent International Corp. manages the largest private equity fund that reached its final close in 2022, Preqin Pro data shows. The firm's buyout fund, Advent International GPE X LP, closed May 23, 2022, raising $26 billion.

Also among the three biggest funds were Thoma Bravo LP's Thoma Bravo Fund XV LP and KKR & Co. Inc.'s KKR North America Fund XIII SCSp, raising $24.34 billion and $19 billion, respectively.