Study Confirms Fundraising Decrease
Dow Jones report shows a fundraising decline of 68% in 2009, as nearly every asset class faced losses
January 13, 2010
A recent study conducted by Dow Jones LP Source has found that financial sponsor’s fundraising in 2009 fell by 68 percent, to a modest sum of $95.8 billion.
By comparison, the asset class raised $299.9 billion in the previous year, as the sector began to slow from its frothy peak of mid-2007. The $95.8 billion raised during 2009 is lower than any year since 2003, as LP investors recoiled in reaction to the sizable losses of PE portfolio companies, and were incapable of committing capital to subsequent funds.
One of the asset classes to see the greatest decline was mezzanine funds, which raised $3.3 billion, a 92% decline from the prior year’s $43.1 billion. In March, The Carlyle Group closed its second mezzanine fund, Carlyle Mezzanine Partners II LP, with $553 million in committed capital. The fund was notable in its success at raising $117 million over the private-equity firm’s initial mezzanine fund, Carlyle Mezzanine Partners I LP. The firm’s 2006 fund closed with $436 million in committed capital. In addition, New York Life Capital raised $800 million in November for its second mezzanine fund, compared to New York Life’s prior fund, which closed with $475 million in 2002.
Meanwhile, LBO and corporate funds raised $53.7 billion last year, a 73% decline from 2008. The midmarket firm TA Associates raised $4 billion in capital for the close of its 11th fund, TA XI LP. The fund follows on TA’s $3.5 billion fund, which closed in March 2006.
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