U.S. PRIVATE EQUITY FUND-RAISING CLIMBS 4%, EUROPEAN FUND-RAISING SPIKES 82%

Dow Jones LP Source: Small number of firms raise half the capital in each region; Established venture firms raise funds quickly

In the first quarter, U.S. and European private equity funds held more closings and raised more capital than in the same period last year, but more than half the capital raised in each region went to a small contingent of firms. U.S. private equity funds raised $38.1 billion for 136 funds, a 4% increase in capital raised and 5% increase in fund closings from the first quarter of 2011. In Europe, private equity fund-raising spiked to $22.3 billion raised for 43 funds, an 82% increase in capital and 10% increase in fund closings, according to Dow Jones LP Source.

The 11 largest U.S. fund closings and the three largest European closings accounted for more than half of the total capital raised in each region.

“U.S. fund-raising may not be off to a roaring start, but it’s also not stalled in the driveway,” said Laura Kreutzer, managing editor of Dow Jones Private Equity Analyst. “P rivate equity firms have been actively focused on returning capital to their investors, which has helped some of them attract capital to new funds. Firms have learned that you must give in order to receive.”

Big Closes for Diversified Private Equity Funds Buoy Buyout Fund-Raising

In the U.S., 63 buyout and corporate finance funds raised $21.9 billion, a 7% increase in fund closings but a 6% decline in capital from the year-ago period. The drop in capital committed was kept to a minimum thanks to strong interest in the diversified private equity sector within buyouts, which raised $5.9 billion for 15 funds, up from $234 million raised by six funds during the same period a year ago.

In Europe, buyout and corporate finance funds drove the region’s overall increase in fund-raising by raising $18.4 billion through 22 closings, a 68% increase in capital collected for two fewer funds compared to the year-ago period.

Similar to the U.S., diversified private equity funds saw dramatic gains in Europe, raising $8.5 billion for four funds, up from $132 million raised for two funds a year ago.

Established Venture Firms Quickly Raise Funds in First Quarter

Several well-established venture firms made fund-raising look easy in the first quarter, holding first and final closes for their funds. These large closes helped push U.S. venture capital fund-raising to $7 billion across 47 funds in 2011, a 5% increase in capital raised and a 34% increase in fund closings.

European venture funds raised $954 million for 11 funds, an 8% increase in capital raised for the same number of fund closings compared to the first quarter of last year.

For more information on venture capital fund-raising, see the venture report http://www.dowjones.com/pressroom/releases/2012/04092012-VCFund-0029.asp.
Fund-Raising for Secondary Funds Spikes

U.S. secondary market funds raised $2.7 billion for five funds during the first quarter, triple the amount raised through eight funds during the same period last year. The difference, however, was the result of a single large closing by a Credit Suisse Private Equity fund, which accounted for 95% of the capital raised during the first quarter.

In Europe, four secondary funds raised $1.2 billion, a significant increase from the same period last year when two funds raised $210 million.

Fund-of-Funds Commitments Fall in U.S., See Continued Momentum in Europe

U.S. funds-of-funds saw the lowest quarterly commitments since the first quarter of 2003 as eight funds raised $733 million.

In Europe, fund-raising for funds-of-funds has already passed the 2011 total as five funds raised $1.6 billion in the first quarter. Throughout 2011, 11 funds raised $1.4 billion.