U.S. Private Equity Firms Raise $132.7 Billion in 1st Half of 2008, 3% Behind Last Year's Record Pace

Dow Jones Private Equity Analyst Reports First Decline in U.S. Fund-Raising Since 2003 as Mega Funds See Delays & LPs Look Overseas; European Fund-Raising Up 16%

NEW YORK, Despite woes in the buyout market, private equity fund-raising continues to hold its ground. In the first six months of 2008, U.S. private equity firms raised $132.7 billion across 185 funds, 3% shy of the $137.2 billion raised by 199 funds during the first half of 2007, according to industry newsletter Dow Jones Private Equity Analyst. The full-year fund-raising record is $313 billion, which was set in 2007.

“For first time since 2003, we’ve seen year-over-year fund-raising actually decline as some of the bigger firms — Blackstone Group, Carlyle Group, and Madison Dearborn Partners — ran into delays raising capital for their latest buyout funds,” said Jennifer Rossa, managing editor of Dow Jones Private Equity Analyst.

Leveraged buyout (LBO) fund-raising declined 20% compared to the same period last year as firms raised only $85.5 billion across 75 funds in the first half of 2008, down from $107.6 billion raised in 91 funds. Seven “mega firms,” defined as firms raising funds of $6 billion or larger, raised $36.6 billion, only a bit below the $37.4 billion raised by eight mega firms last year.

“The weakness in the buyout industry, however, has been offset by strong fund-raising by mezzanine funds and a decent showing by venture capital funds,” added Ms. Rossa.