GLOBAL - The worldwide private equity sector has raised US$76.2bn from pension funds and other institutional investors in the second quarter of this year, according to data by Preqin.
Private equity funds with a US focus were the strongest fundraisers with 46 funds bringing in $49bn while 22 funds targeting the European market raised $24.7bn. Fourteen funds investing in Asia and the rest of the world raised $2.4bn.
Preqin spokesman Tim Friedman said these results, compounded with the negative performance figures of private equity for 2008, had both positive and negative impacts for institutional investors.
He said: "On the positive side, investors are generally still very keen to gain access to private equity. On the negative side, many investors are still suffering from the denominator effect, and many have concerns regarding future capital call-ups.
"As a result, the level of capital available to invest in private equity funds has fallen, and many investors are not currently able to invest at all, and those that are will be committing less capital than in previous years in order to reach their target allocation."
IE Consulting principal Matthew Craig-Greene said he expected fundraising to remain subdued through 2009.
He added: "We do not expect aggregate fundraising to return to 2007 levels for quite some time, as some general partners fail to raise follow-on funds on the back of current performance and restrictive debt markets prohibit the largest buyouts from taking place."
He also said: "Pension funds and other investors in private equity are still taking stock of current investments and the increased due diligence they are conducting on potential new investments will slow fundraising further. This is good news for private equity, as it is sure to impact positively on returns."
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