U.S. Private Equity Fund-Raising Plummets 68% in 2009; Worst Year and First Sub-$100 Billion Year Since 2003
12 Gennaio 2010 - 1:00PM
PR Newswire (US)
Dow Jones LP Source: Fund-Raising Drops Dramatically in All Sectors
Except Secondary; Private Equity Funds Raise $20.5 Billion in 4Q,
Bringing 2009 Total to $95.8 Billion NEW YORK, Jan. 12 /PRNewswire/
-- U.S. private equity fund-raising closed out its worst year for
fundraising since 2003 with 331 funds raising $95.8 billion, down
68% from the $299.9 billion raised by 508 funds in 2008, according
to figures from Dow Jones LP Source. With the lone exception of
secondary funds, every sector experienced sharp slowdowns. In the
fourth quarter, firms raised $20.5 billion in 75 funds, down 80%
from the $102.7 billion raised by 188 funds in 2008. "2009 was the
year of the equal opportunity slump for the U.S. private equity
industry," Jennifer Rossa, managing editor of Dow Jones Private
Equity Analyst said. "With the exception of the secondary market,
firms across the board had a difficult time raising funds from
limited partners who simply did not have capital to commit. As the
liquidity market loosens up, limited partners will become more
active but 2010 will not see a return to levels seen before the
economic downturn." Buyouts Account for Majority of Funds Raised
Despite Drop in Mega Funds Leveraged buyout and corporate finance
funds, while still constituting the biggest slice of the capital
pie, raised just $53.7 billion across 133 funds in 2009. This is a
73% drop from the $195.5 billion raised by 204 funds in 2008 and
the sector's slowest year since 2003. In the fourth quarter, 35
funds raised $9 billion, an 83% drop from the same period last
year. Mega funds, which are funds of $6 billion or more, for the
most part had a difficult time raising money in 2009. Six mega
funds raised $14 billion, accounting for 26% of buyout
fund-raising. More than half of the year's mega fund total was
raised by Hellman & Friedman LLC, which raised $8.8 billion --
all in 2009 -- for Hellman & Friedman Capital Partners VII LP.
In 2008, 12 vehicles raised $75 billion, accounting for almost 40%
of the buyout market. Distressed funds, a subsector of buyouts,
raised $14.2 billion across 30 funds, a 67% drop from a
record-breaking 2008. Secondaries Spike, Set Record The secondary
market was the only subsector of private equity to turn in a strong
performance. The $17.5 billion collected by secondary funds in 2009
is up 83% from 2008 and set a new record. Several
billion-dollar-plus funds, including Goldman Sachs Private Equity
Group's $5.5 billion GS Vintage Fund V LP which accounted for 31%
of the capital raised for secondary funds in 2009, lead the way in
the record-setting year. In both 2008 and 2009, 21 secondary funds
were raised. "Thanks to a few large funds, the secondary market had
a banner year," said Ms. Rossa. "The question now is whether firms
will be able to deploy that capital. Unless buyers and sellers can
come to an agreement on prices, firms will continue to sit on the
billions of dollars slated for secondary transactions." Venture
Capital Fared Better Than Other Sectors While still down
significantly, venture capital firms did not have as difficult a
year as buyout firms. Venture fund-raising fell 55% to $13 billion
across 120 funds from the $28.7 billion collected by 204 funds in
2008. It was the slowest year since 2003 for the sector. In the
fourth quarter, 21 funds raised $4.4 billion, a 56% drop from the
same period last year. A few of the big winners in 2009 were New
Enterprise Associates which raised $1.2 billion, taking the total
amount raised to date for the firm's 13th fund to $2.5 billion, and
Norwest Venture Partners which closed its 11th fund in the fourth
quarter after raising $1.2 billion. Mezzanine funds raised just
$3.3 billion across 20 funds, down 92% from $43.1 billion raised by
24 funds in 2008. In the fourth quarter, seven funds raised $1.7
billion, a 90% drop from the same period last year. Outside of
Hellman & Friedman's mega fund and Goldman Sachs Private Equity
Group's secondary fund, the fund that closed on the most capital in
2009 was TA Associates Inc's 11th fund. In 2009, the firm collected
$3.5 billion for its 11th fund which has raised a total of $4
billion. For deeper analysis, including an in-depth look at venture
capital fundraising, download the complete report from Dow Jones at
http://www.fis.dowjones.com/PEA/4QUSPEFundraising.html. For more
information about Dow Jones LP Source or Private Equity Analyst,
visit http://privateequity.dowjones.com/. About Dow Jones Dow Jones
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