PE Fundraising Hits Brakes
on 07 January 2010, 13:55
by Red Herring Staff
Private equity fundraising declined precipitously in 2009, according to a report, its worst year since 2004.
Industry researcher Preqin on Thursday reported that 482 funds worldwide raised $246 billion in 2009, down 61 percent from the $636 billion raised in 2008.
“Although investors are in a much clearer position now than at the start of 2009, the chances of a return to the fundraising levels seen in 2007 and 2008 are very slim, Preqin representative Tim Friedman said in a statement.
Particularly dismal, fourth-quarter 2009 saw only $35 billion raised, the lowest level since third-quarter 2003.
The biggest category of funding went to buyouts, raising $102 billion by 84 funds in 2009. The largest regional deployment went to North America, where 228 funds focused there raised $145 billion. That compares with 136 Europe-focused funds that raised $74 billion and 118 Asia and other world regions raising $27 billion.
LPs have seen lower investment returns and have less money to commit to funds, according to the Preqin report, and that isn’t expected to change anytime soon unless the exit market improves.
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