Private Equity Fund Raising Down 8% In Q1
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U.S. private equity fund-raising fell in the first-quarter of 2010 8 percent from the same period last year, despite an increase in fund closings.
The most recent quarter's totals dipped to $17.6 billion raised by 97 funds, compared to $19.1 billion by 75 funds in the year-ago period.
The evidence of just how hard the industry was hit by the economic downturn and the credit crunch can be seen in the comparison of the first quarter of 2010 to two years ago when $65.9 billion was raised by 108 funds.
"The fundraising total is negligible, but the story behind the numbers is telling," Jennifer Rossa, managing editor of Dow Jones Private Equity Analyst said. "Many commitments made during the first quarter were to funds early in their fundraising process unlike the same period last year when many closes were holdovers from 2008. We are seeing that limited partners are willing to put what they have to work, though they may not have much to invest."
Corporate finance funds and leveraged buyouts received the majority of the capital in the first quarter that was put into private equity funds, with $9.7 billion for 39 funds, which was up slightly from the $9.6 billion raised for 27 funds in the year-ago period.
Distressed funds raised $3.5 billion for seven funds, up significantly from the same period last year when the sub-sector of buyouts raised $1.1 billion for four funds, while mezzanine funds claimed $1.5 billion for seven funds, nearly doubling the $821 million raised by five funds last year.
"Specialist strategies, such as distressed and mezzanine, had a healthy start to the year," said Ms. Rossa. "The move toward more targeted strategies allows limited partners to dive into sectors they think have greatest potential for returns and diversify what are often buyout-heavy portfolios."
Venture funds raised $4.1 billion for 34 funds in the first quarter, a 41 percent increase from the $2.9 billion raised last year for 25 funds.
The most recent quarter's totals dipped to $17.6 billion raised by 97 funds, compared to $19.1 billion by 75 funds in the year-ago period.
The evidence of just how hard the industry was hit by the economic downturn and the credit crunch can be seen in the comparison of the first quarter of 2010 to two years ago when $65.9 billion was raised by 108 funds.
"The fundraising total is negligible, but the story behind the numbers is telling," Jennifer Rossa, managing editor of Dow Jones Private Equity Analyst said. "Many commitments made during the first quarter were to funds early in their fundraising process unlike the same period last year when many closes were holdovers from 2008. We are seeing that limited partners are willing to put what they have to work, though they may not have much to invest."
Corporate finance funds and leveraged buyouts received the majority of the capital in the first quarter that was put into private equity funds, with $9.7 billion for 39 funds, which was up slightly from the $9.6 billion raised for 27 funds in the year-ago period.
Distressed funds raised $3.5 billion for seven funds, up significantly from the same period last year when the sub-sector of buyouts raised $1.1 billion for four funds, while mezzanine funds claimed $1.5 billion for seven funds, nearly doubling the $821 million raised by five funds last year.
"Specialist strategies, such as distressed and mezzanine, had a healthy start to the year," said Ms. Rossa. "The move toward more targeted strategies allows limited partners to dive into sectors they think have greatest potential for returns and diversify what are often buyout-heavy portfolios."
Venture funds raised $4.1 billion for 34 funds in the first quarter, a 41 percent increase from the $2.9 billion raised last year for 25 funds.
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