Private equity is enjoying the best fundraising climate in years, but some larger generalist firms have decided against raising new funds. As a result, younger general partners have been breaking away to launch the next generation of middle-market funds. Some have already succeeded in raising new funds, while others are still in the fundraising process.

On the whole, these newbie funds are smaller in size and more narrowly focused. And limited partners are ponying up. According to Coller Capital's Global Private Equity Barometer, 70 percent of PE investors in North America intend to invest in first-time funds between now and 2016. This is a dramatic shift from recent years. In 2013, first-time funds accounted for just 7 percent of funds raised by private equity firms, according to Coller.

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