A new report from Dow Jones shows that 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. 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. “Private 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.”
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.
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