Private capital fundraising posted a banner year in 2019, with $888 billion raised across 1,064 funds, the most private capital ever raised on an annual basis, according to PitchBook’s Private Fund Strategies Report. The $26 billion flagship vehicle raised by Blackstone marked the largest buyout fund ever.

“Globally, PE firms raised more money than they have in any prior year, closing on nearly half a trillion dollars with LPs plowing both freshly allocated capital and reinvested distributions into the strategy,” says the report. “Many GPs sought to capitalize on the favorable environment by raising substantially larger amounts than they had for their previously marketed funds.”

The role private funds play in institutional portfolios continued to grow. On average, institutional investors increased their allocations to private markets, generally by lowering their allocations to hedge funds and/or public equities.

Venture capital fundraising figures fell slightly from the previous year, but PitchBook says the fundraising outlook for VC remains bright. “U.S.-based funds in 2019 had a gargantuan year for investment realizations and saw exit value more than double YoY, which will eventually turn into distributions to LPs. As LPs receive their cash, we expect them to recycle it into new venture funds.”

Private debt fundraising rebounded in 2019, notching the second-highest amount of capital raised annually in the strategy’s history, says the report. “As in other private market strategies, the number of funds closed fell YoY despite more capital being raised overall. Direct lending funds, propelled by the threat of further regulation that would curtail lending from traditional banks, continue to fill the void and lend heavily to middle market companies. Additionally, private debt keeps attracting investors thirsty for yield in a low-growth regime. As capital has flooded in and AUM has skyrocketed more than 350 percent in the past decade, many industry observers fear investors have taken on more risk than they realize.”

Looking ahead, the report writers were cautiously optimistic. “Many of the secular tailwinds remain intact, meaning fundraising should remain robust heading into 2020,” says the report. “However, the oft-discussed threat of an impending recession could finally put a meaningful dent in the fundraising totals, and LPs’ desire to co-invest and execute deals directly may reduce the need for these investors to make fund commitments.”

For ongoing coverage of private equity fundraising, see Mergers & Acquisitions’ weekly column. And for more analysis on 2019, read profiles of Audax, HarbourVest, Genstar and other top firms.