The capital overhang in the venture capital industry hit a decade high last year as managers in the United States and Europe raised money at a rapid pace.
As of June 30, 2016, the overhang climbed to $121.4 billion, an increase of $26 billion, or 27 percent, from the year-earlier period, according to a study from PitchBook. Almost $100 billion of the total sits in funds raised in the 2014-to-2016 vintages.
The rise came as U.S. and European firms saw record fundraising for the year, with $51.3 billion raised by 328 funds, the study found.
Large funds contributed significantly to the rise. More funds of greater than $100 million closed in 2016 than in any year during the past decade, including 28 funds larger than $500 million, also a decade high.
As a result, the median fund size for the year grew to $85 million, and the average fund size rose to $163 million, the study found.
Also adding to the strong year, first-time funds gathered the most in commitments since 2008, or $3.8 billion.
In contrast, the number of micro funds of less than $50 million fell to a 10-year low of 118, and total commitments were just $1.5 billion. That’s the lowest in a decade.
The report examined just North American and European funds.
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