U.S. and European Private Equity Fund-raising Have Best First Half Since 2008

NEW YORK, July 9, 2012 /PRNewswire/ -- Limited partners showed strong support for U.S. and European private equity funds in the second quarter, helping both regions achieve the best first half for fund-raising since 2008, according to Dow Jones LP Source.

In the first half of 2012, U.S. private equity funds raised $86 billion for 235 funds, a 27% increase in capital raised despite a 4% decline in fund closings from the first half of 2011. In the second quarter alone, U.S. funds raised $44 billion.

European private equity funds raised $37.3 billion for 79 funds in the first half of 2012, a 39% increase in capital but a 10% decline in fund closings compared to the same period last year. In the second quarter, European funds raised $14.2 billion.

"Overall, private equity firms produced a record level of distributions in 2011 and that's paid off in the form of increased commitment volume to the asset class,"said Laura Kreutzer, managing editor of Dow Jones Private Equity Analyst. "Limited partners also had a lot of choices given that many veteran firms returned to the fund-raising trail this year."

Industry-Focused Funds, Venture Fund-Raising On The Rise In The U.S.

U.S. buyout and corporate finance funds raised $59 billion for 108 funds in the first half, a 30% increase in capital from the year-ago period. Within this segment, LPs are gravitating toward funds focused on a specific industry such as financial services, energy or technology. Twenty-three industry-focused funds raised $13.8 billion during the first half, the strongest first half on record for these funds. Dow Jones LP Source has been tracking private equity fund-raising since 2000.

Also within the buyout and corporate finance segment, 44 buyout and acquisition funds raised $24.3 billion, a 31% increase in capital. Diversified private equity funds had their best first half on record as 18 funds raised $12.7 billion.

More money flowed into venture capital in the first half. Eighty-two venture capital funds raised $13 billion in the first half, a 31% increase in capital from the same period a year ago. For a detailed report on venture fund-raising, visit http://www.dowjones.com/pressroom/releases/2012/07092012-VCFund-0051.asp.

Mezzanine funds raised $7.2 billion for 17 funds in the first half, more than double the capital raised in the year-ago period despite two fewer fund closings.

Investment in secondary funds rose 33% to $4.7 billion for 11 funds.

Funds-of-funds bucked the upward trend as capital commitments to the segment fell 65% to $2.1 billion for 17 funds.

LPs Temper Investment Pace In Europe After Record First Quarter

Limited partners in European funds tempered their investment pace in the second quarter after committing $23.1 billion in the first quarter, which was the best first quarter on record. While the $14.2 billion committed in the second quarter was a much more moderate investment pace, it nearly matched the $14.6 billion raised during the same period last year.

In Europe, 33 buyout and corporate finance funds raised $23.9 billion in the first half, an 8% increase in capital. Within this segment, buyout and acquisition funds saw a 41% decline in capital as 16 funds collected $10.2 billion. Diversified private equity funds made up for the loss by raising $10.1 billion for 7 funds, more than 10 times the capital collected in the same period last year for the same number of funds.

Twenty-seven European venture funds raised $2.3 billion, a 26% increase in capital raised for the same number of fund closings compared to the first half of last year.

Investment in secondary funds more than quadrupled as eight funds raised $8 billion. Funds-of-funds also saw a significant increase in investment as eight funds raised $2.8 billion, up from five funds that raised $269 million in the same period last year.

Mezzanine funds did not fare well in the first half as two funds raised $224 million, down from $1 billion raised for three funds during the first half of last year.

To download charts or link to this report, visit http://www.dowjones.com/pressroom/releases/2012/07092012-PEFund-0050.asp.

Dow Jones LP Source classifies multiple fund closings (first, interim, final) separately to provide an accurate view of the fund-raising environment.

For more information about Dow Jones Private Equity and Venture Capital products, visit http://www.dowjones.com/pr/privatemarkets.

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