In the first quarter, US and European private equity funds held more closings and raised more capital than in the same period last year, but more than half the capital raised in each region went to a small contingent of firms.
US private equity funds raised USD38.1 billion for 136 funds, a 4% increase in capital raised and 5% increase in fund closings from the first quarter of 2011. In Europe, private equity fund-raising spiked to USD22.3 billion raised for 43 funds, an 82% increase in capital and 10% increase in fund closings, according to Dow Jones LP Source.
The 11 largest US fund closings and the three largest European closings accounted for more than half of the total capital raised in each region.
“US fund-raising may not be off to a roaring start, but it’s also not stalled in the driveway,” says Laura Kreutzer (pictured), managing editor of Dow Jones Private Equity Analyst. “Private equity firms have been actively focused on returning capital to their investors, which has helped some of them attract capital to new funds. Firms have learned that you must give in order to receive.”
In the US, 63 buyout and corporate finance funds raised USD21.9 billion, a 7% increase in fund closings but a 6% decline in capital from the year-ago period. The drop in capital committed was kept to a minimum thanks to strong interest in the diversified private equity sector within buyouts, which raised USD5.9 billion for 15 funds, up from USD234 million raised by six funds during the same period a year ago.
In Europe, buyout and corporate finance funds drove the region’s overall increase in fund-raising by raising USD18.4 billion through 22 closings, a 68% increase in capital collected for two fewer funds compared to the year-ago period.
Similar to the US, diversified private equity funds saw dramatic gains in Europe, raising USD8.5 billion for four funds, up from USD132 million raised for two funds a year ago.
Several well-established venture firms made fund-raising look easy in the first quarter, holding first and final closes for their funds. These large closes helped push US venture capital fund-raising to USD7 billion across 47 funds in 2011, a 5% increase in capital raised and a 34% increase in fund closings.
European venture funds raised USD954 million for 11 funds, an 8% increase in capital raised for the same number of fund closings compared to the first quarter of last year.
