$246bn Raised by PE Funds in 2009 – Lowest Total Since 2004

London, United Kingdom, January 08, 2010 --(PR.com)-- Putting the Results in Context:

Private equity fundraising has had its worst year since 2004, with only $246bn raised by 482 funds worldwide. This is 61% down on the $636bn raised in 2008, and 62% down on the record $646bn raised in 2007. Q4 2009 represents a low point for the year, with only $35bn raised by 75 funds – the lowest quarterly total since Q3 2003.

Key Statistics Include:

Of the $246bn raised in 2009, buyout funds raised the most capital, with $102bn raised by 84 funds. 170 venture funds raised $27bn, while 96 real estate funds raised $41bn.

In Q4 2009, 13 buyout funds closed with an aggregate $14bn, 24 venture funds closed with $4bn, and 17 real estate funds closed with $7bn.

Funds focusing primarily on North America raised the most in commitments over 2009, with 228 funds raising an aggregate $145bn. 136 funds focusing primarily on Europe raised $74bn, while 118 Asia and Rest of World funds raised $27bn. In Q4 2009, North American funds raised $19bn, European funds $11bn, and Asia and Rest of World funds $5bn.

The largest fund to close during 2009 was CVC European Equity Partners V, which closed early in the year with €10.75bn in commitments. The vehicle invests in mid-market companies in Europe.

The largest fund to close in Q4 2009 was Clayton Dubilier & Rice VIII, a buyout fund targeting companies in North America and Europe. It closed at the very end of 2009 with total commitments of $5bn.

The average length of time taken for a fund to reach a final close has increased dramatically over the last two years, and now stands at more than 18 months for funds closed in 2009, up from one year for funds closed in 2007.

Over the course of 2009, 60% of private equity investors surveyed made at least one new commitment to a private equity fund, while 40% of investors did not make any new commitments.

Just over half of investors plan to make their next commitment to a private equity fund in the first half of 2010, and 16% plan to wait until the second half of the year.

Comment:

“Fundraising conditions have been extremely challenging in 2009, with a significant number of investors holding back from making new investments. Our survey of over 100 leading LPs, conducted in December ’09, shows that just 60% of investors have made new commitments in 2009, with many of these institutions investing in far fewer funds than in previous years.

Although the recovery in the public markets and adjustment in private equity fund valuations has alleviated the denominator effect that many investors were suffering from at the start of 2009, we are finding that many backers of private equity funds have fundamentally altered their attitudes towards the asset class.

We are seeing investors focusing more on understanding the state of their existing portfolios and spending considerably more time when considering new vehicles. Negotiating terms and conditions has become more of a key concern, and we are seeing a trend away from the bigger mega-buyout funds towards more of a focus on smaller mid-market and regionally focused vehicles.

Although investors are in a much clearer position now than at the start of 2009, the chances of a return to the fundraising levels seen in 2007 and 2008 are very slim. As a result of the lack of distributions that they have received from existing investments, investors have less capital available to commit to new funds, and although the majority of investors will be active in 2010, it will be at a lesser rate than in recent years. It will not be until we see the market for exits recover significantly that we will see annual private equity fundraising attaining $500bn-plus levels once again.”

Tim Friedman, Head of Communications, Preqin

About Preqin:

Preqin is the leading source of information for the alternative assets industry, providing data and analysis via online databases, publications and bespoke data requests.

Preqin has built a reputation in the alternative assets industry for providing the most comprehensive and extensive information possible. Leading alternative assets professionals from around the world rely on Preqin’s services daily, and its data and statistics are regularly quoted by the financial press. For more information, please visit: www.preqin.com

Note to Editors:

· Please note that Preqin has completely replaced Private Equity Intelligence as the official company name.

· Preqin is spelled without the letter ‘U’ after the ‘Q’.

For more information, please contact:
Tim Friedman on +44(0)20 7065 5180 or tfriedman@preqin.com

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