PE fund-raising in 2009 lowest since 2003

Global private equity fund-raising has hit a low of $45.9 bn in the first three months of 2009.

Global private equity fund-raising has hit a low of 45.9 billion dollars in the first three months of calendar 2009,the smallest amount since 2003,on account of the turbulent economic scenario.

“Q1 2009 represents the lowest fund raising quarter for the private equity industry since 2003,with only 71 funds having achieved a final close,raising an aggregate USD 45.9 billion,” a report by global research firm Preqin said.

In the fourth quarter of 2003,PE firms had raised USD 34 billion with 131 funds achieving final closure.

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“The slowdown in fund raising in the first quarter of 2009 has been dramatic,but not unexpected. Many of the fund managers we have been speaking with have indicated that they are going to be postponing the final closing of their current vehicles as a result of falling investor appetite,” Preqin spokesperson Tim Friedman said.

In terms of the number of funds achieving financial closure,Q1 2009 is the lowest quarter since Q3 2003,when only 67 funds did so. “The results demonstrate the hugely challenging environment that is currently facing firms with funds on the road,” the report added.

The quarter saw ‘buy-outs’ accounting for the highest amount raised as 15 funds together mobilised USD 22.7 billion,followed by ‘real estate’ with 22 funds raising an aggregate of USD 13 billion.

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