Full Speed Ahead For Private Equity Fundraising

Oct 20 2008 | 3:48pm ET

While the public financial markets are in crisis, U.S. private equity firms not only continue to stockpile capital but have picked up the pace of their fund-raising.

Private equity firms raised $222.6 billion for 264 funds during the first three quarters of 2008, 11% ahead of the $200.4 billion raised for 298 funds in the same time last year, according to Dow Jones Private Equity Analyst. That is in contrast to the halfway point of this year, when fund- raising slightly lagged last year's pace, and is despite a slow-down in buyout fund-raising. The full-year fund-raising record of $313 billion was set in 2007.

Distressed firms are seeing strong interest from investors with 18 funds raising $37.9 billion thus far this year, up 28% from $29.5 billion raised by 16 funds at this point last year. Distressed firms raised a record $48.2 billion in 2007.

Mezzanine funds are apparently also having a great year, gathering $36.9 billion across 13 funds, compared to $3 billion across nine funds through the third quarter last year, according to the publication. And the corporate finance and industry-focused buyout segments collectively saw 78 funds raise $103.3 billion, down 12% from the 98 funds that raised $118 billion during the first three quarters last year. Buyout firm TPG Capital helped the overall numbers in the third quarter, disclosing that it had raised an additional $7.8 billion for TPG Partners VI, bring its year-to-date total for the fund to $19.8 billion. The firm also collected $6 billion for TPG Financial Partners.

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