By Jim Adlam
Financial Review
The rebounding of private equity fund-raising in the US and Europe provide one of the few crumbs of comfort for the finance sector in the first quarter of 2011.
US private equity funds secured $31.6bn during the quarter, more than double the $13.5bn raised in the first quarter of 2010, according to data from Dow Jones. Every sector except mezzanine benefited from the uplift.
The story was not quite so impressive in Europe, yet funds across the continent raised $8.2bn during the quarter, well up on the $5.9bn of the first quarter of 2010. In Europe the number of closings dropped from 32 to 22, the figures report.
As more middle-market funds entered the market this year, a total of 41 US buyout funds raised USD19.2 billion during the first quarter of 2011, up from USD6.6 billion raised by 29 funds a year earlier. This rebound was driven by large commitments to funds from firms including Kohlberg Kravis Roberts (KKR), GTCR Golder Rauner and Oaktree Capital Management.
In the US buyout industry, upper mid-market funds - or those of between USD1 billion and USD5 billion each - shone brightest as buyout and acquisition funds captured limited partners' attention. Buyout and acquisition funds collected USD8.7 billion (across 17 funds) during the first quarter of 2011, more than three times the amount raised during the same period in 2010.
In Europe, buyout funds, which account for the bulk of that region's private equity industry, secured USD7.3 billion for 15 funds during the first quarter, up from USD2.9 billion raised for 12 funds a year earlier. As in the US, a small number of firms captured the bulk of the money.
Venture capital fund-raising rose to USD7.7 billion across 25 funds during the first quarter of 2011, a 97 per cent increase from the USD3.9 billion collected by 32 funds during the same period in 2010. A small number of large closings from Sequoia Capital, Bessemer Venture Partners and other firms helped lift US venture fund-raising for the quarter.
European venture firms were not as fortunate, however, raising USD653 million for five funds during the quarter, down from USD1.3 billion for 13 funds raised during the same period last year.