| |||||||||||
| |||||||||||
 The radical slowdown in the ability of private equity firms to make leveraged buyouts has finally caught up with the industry's inability to raise new money as fundraising for the asset class tumbled 64% in the first half of 2009, according to a report released today by Dow Jones Private Equity Analyst. "The first six months of 2009 saw 173 private equity funds raise $54.9 billion, 64% less than the $152.7 billion raised by 261 funds during the first half of 2008 and the lowest mid-year total raised since 2005," the report said. The Dow Jones report recorded 73 buyouts funds raised $28.7 billion, 72% less than the $102.6 billion raised by 98 similar funds during the same period in 2008. However, there continues to be strong growth for secondary funds, 18 of which raised $13.9 billion in the first half, more than was raised in all of 2008. In 2008, private equity firms raised a total of $287.5 billion, second only to the record $343.3 billion raised in 2007. With pension funds and other institutional investors that make up their limited partner base strapped for cash themselves, it's little wonder that PE shops are gathering less. It's not just that LPs are less willing to participate in new funds either, as the inability to get leveraged financing for new deals has private equity firms scaling back the target size of new funds. Wednesday British PE firm 3i Group plc said that it has done no new deals in the last quarter. Meanwhile, some firms are finding the fundraising environment so tough that they are giving up altogether. A study released last week by research firm Preqin, which included 1,622 fund managers, found 30 confirmed cases of abandoned fundraising this year versus 30 for all of last year. (The Deal Pipeline subscribers can read the full story here.) Things did finish strong though as the Carlyle Group announced a $1.04 billion fund targeting investments in private companies in China, India, South Korea and other key Asian markets on June 30. (The Deal Pipeline subscribers can read the full story here.) - George White
CategoriesPrivate capital video
Categories
Blog roll
Archives
| |||||||||||
|
|
|
|
|
©Copyright 2009, The Deal, LLC. All rights reserved. Please send all technical questions, comments or concerns to the Webmaster.
