PE Fundraising Took Another Dive in 2010
Dow Jones study finds that fundraising dropped another 16% from the previous year; mid-market buyouts funds managed to come out on top.
January 12, 2011
Dow Jones LP Source reported that US private equity fundraising fell again last year, coming in 16% below an already depressed 2009. The report showed that 336 funds raised $86.3 billion in 2010 compared to 366 funds, which raised a total of $102.2 billion the previous year. It wasn't all bad news, as distressed debt, mezzanine and industry focused funds were able to improve on the previous year's totals.
Last year 138 buyout funds managed to raise $53.3 billion, a 9% decrease from the $58.4 billion raised by 148 funds in 2009. In the fourth quarter, 32 buyout funds raised $19.8 billion, a 53% increase from the same period last year.
By and large, middle market funds were responsible for more than half of total buyout fundraising. Funds that kept its sights on a specific sector managed to keep their LP’s attention and were able to intrigue LPs. Industry-focused funds, that had less than $1 billion in assets, raised $15.2 billion in 2010, up from $10.1 billion in 2009.
The mega funds that had more than $6 billion, weren’t so lucky. Blackstone Capital Partners VI LP was the only US fund that reached the ‘mega-fund threshold' in 2010, raising $14 billion. According to the study, the $5 billion raised in 2010 for the Blackstone fund accounted for 25% of buyout funds raised in the fourth quarter and 9% of buyout funds raised in 2010.
The report also included that distressed debt funds saw a 30% increase from 2009 in which it raised $18.4 billion in 2010. Oaktree Capital Management was noted as the top distressed debt fund for 2010 where the firm raised $4.4 billion for its final close of its Oaktree Opportunities Fund VIII LP.
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