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Private Equity Firms In U.S. Raise $132.7 Billion
Still a good news for the U.S. private equity firms that, its fund raising continued in a firm pace, though dropping slightly from the last year record levels.
The equity firms in the United States raised $132.7 billion across 185 funds in the first six months of this year, just 3 percent less than the $137.2 billion, raised by 199 funds during the same period in 2007, according to the Dow Jones Private Equity Analyst report.
Jennifer Rossa, managing editor of Dow Jones Private Equity Analyst said, “For first time since 2003, we’ve seen year-over-year fund-raising actually decline as some of the bigger firms — Blackstone Group, Carlyle Group, and Madison Dearborn Partners — ran into delays raising capital for their latest buyout funds.”
Reportedly, in the six months leveraged buyout fund raising declined 20 percent, as compared to the same period last year. These firms raised only $85.5 billion across 75 funds, down from $107.6 billion raised from 91 funds last year.
According to the report, while leveraged buyout fund-raising declined, mezzanine fund-raising set a new record for the first half of 2008 with $24 billion raised by seven firms. At the same, venture capital fund raising also increased by 15 percent to $11.5 billion from 72 funds, slightly up from $10 billion raised by 62 funds last year.
“The weakness in the buyout industry, however, has been offset by strong fund-raising by mezzanine funds and a decent showing by venture capital funds,” said Jennifer Rossa.
Warburg Pincus LLC and Lightspeed Venture Partners have posted the largest figures in the buyout fund and venture capital fund respectively.
Warburg Pincus LLC’s $ 15 billion Warburg Pincus Private Equity X LP is the largest buyout fund in the first half of this year, while Lightspeed Venture Partners posted the largest venture capital fund with $800 million for its Lightspeed Venture Partners VIII LP fund.
According to the Dow Jones Private Equity Analyst report, the first half of 2008 was also good for European private equity firms. They saw a 16 percent increase in investment during the period as compared to the same period last year. This year a total of $61.1 billion invested in 80 funds, while it was $52.5 billion in 81 funds last year. Of the 61.1 billion, buyout funds accounted for $54.8 billion or nearly 90 percent of Europe’s total fund raising.
According to Ms. Rossa, “The differing fortunes of European private equity funds are an indication that limited partners are shifting some attention away from the U.S., where the economy is seen as particularly weak and where many of LPs are over-concentrated.”