Bain & Company said the lack of firms raising more than $5bn underlines a drop both in the average fund size and the number of funds closing.

No buyout fund closed with more than $5bn in the first three months of this year, marking the first time in a decade that the quarterly threshold has not been hit.

“The unwanted milestone is a pointed illustration of two recent trends: a decline in the average size of funds raised and a drop in the number of funds closing,” said Bain & Company in its latest mid-year report.

The consultancy giant said that the slump in fundraising might now have bottomed out, but the hope of a recovery in the inflows of fresh capital has likely been pushed out into next year.

It found that more than 18,000 private capital funds are on the road, collectively seeking $3.3tn.

“That means there’s about $3 of demand out there for every $1 of supply. It remains to be seen how much the emergence of private wealth as a source of funding can ease this mismatch by boosting supply,” Bain & Company noted.

 The intense competition to raise funds is being exacerbated by cash-starved investors who are waiting for buyout shops to return money before handing out commitments to future funds.

The lack of liquidity has been highlighted by historical fund cash flows which suggest the ratio of distributed to paid-in capital would ordinarily be about 0.8x for US and Western European funds raised in 2018, yet today it stands only a little higher than 0.6x, according to the report.

“LPs are increasingly dissatisfied with partial or minority exits; instead, they are pushing for full, traditional realisations despite the headwinds faced by such transactions,” it added.

Some LPs are pivoting to secondaries deals in order to drum up cash. Bain & Company said that the Chinese sovereign wealth fund, China Investment Corporation, has reportedly been seeking secondary market buyers for about $1bn in private equity investments, while Yale University confirmed it was exploring a sale of private equity fund interests from its endowment.