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European private equity firms raise near-record USD105.7bn in 2008

Even with the broader economic pullback in the final quarter of the year, European private equity firms managed to raise USD105.7bn across 156 funds in 2008, according to Dow Jones Priv

Even with the broader economic pullback in the final quarter of the year, European private equity firms managed to raise USD105.7bn across 156 funds in 2008, according to Dow Jones Private Equity Analyst.

The figure is up ten per cent from the USD96.2bn raised via 215 funds in 2007 and just shy of the annual fund-raising record of USD110.2bn set in 2006.

Conversely, US private equity firms saw fund-raising fall 18 per cent from the record USD325.8bn raised by 506 funds in 2007 to USD265.6bn raised via 363 funds in 2008.

‘The stronger performance in Europe is because the region appeared more resilient to the economic downturn than the US, which allowed big European funds to continue raising money deeper into the year,’ says Jennifer Rossa, managing editor of Dow Jones Private Equity Analyst.

‘Many US-based limited partners put money to work in Europe, convinced they would see better returns than in the tapped-out US market. And European limited partners generally had more bandwidth to continue investing. But no one expects 2009 to be a good year for fund-raising, as it’s now abundantly clear that Europe faces the same troubles as the US.’

According to Dow Jones Private Equity Analyst, the majority of investor interest in Europe went to buyout and corporate finance funds, which raised a record USD91.2bn – roughly 86 per cent of overall fund-raising – across 78 funds, up nearly 41 per cent from the USD64.9bn raised in 89 funds in 2007.

CVC Capital Partners of London raised the most capital in Europe in 2008 with USD10.97bn raised for its CVC European Equity Partners V, a buyout fund that is still open with a minimum target of USD15bn.

European venture capital firms raked in roughly USD6.4bn across 48 funds in 2008, up 12 per cent from USD5.7bn raised by 66 funds in 2007.

Dow Jones Private Equity Analyst says this marks the highest fund-raising total for the European venture industry since at least 2005.

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