US private equity fund-raising defied expectations in 2010, declining even further from the low levels of 2009, according to figures from Dow Jones LP Source. In all, 336 funds raised USD86.3 billion in 2010, down 16% from the USD102.2 billion raised by 366 funds in 2009.
While most sectors experienced a slowdown, 2010 saw a few bright spots as distressed debt funds, mezzanine funds and industry-focused funds raised more money than they did in 2009.
Although overall fund-raising was down for the year, in the fourth quarter, firms raised USD26.7 billion in 65 funds, up 19% from the USD22.5 billion raised by 101 funds in the same period in 2009.
"Despite high expectations for fund-raising in 2010, many firms ended up sitting by the edge of the pool so that they could focus on returning capital to investors," says Laura Kreutzer, managing editor of Dow Jones Private Equity Analyst. "As we head into 2011, more firms are diving into the fund-raising market, either because they have a better story to tell or because they can’t afford to wait any longer."
