Less equity for private equity

Private equity funds, like the two prepared to buy Clear Channel Communications the end of this month, raised $132.7 billion in the first half of this year, according to Dow Jones Private Equity Analyst Reports. That’s a lot of money, but down 3% from a year ago.

"For first time since 2003, we've seen year-over-year fund-raising actually decline as some of the bigger firms – Blackstone Group, Carlyle Group, and Madison Dearborn Partners – ran into delays raising capital for their latest buyout funds," said Jennifer Rossa, Managing Editor of Dow Jones Private Equity Analyst.

Leveraged buyout (LBO) fund-raising declined 20% compared to the same period last year as firms raised only $85.5 billion across 75 funds in the first half of 2008, down from $107.6 billion raised in 91 funds. Seven "mega firms," defined as firms raising funds of $6 billion or larger, raised $36.6 billion, only a bit below the $37.4 billion raised by eight mega firms last year.

"The weakness in the buyout industry, however, has been offset by strong fund-raising by mezzanine funds and a decent showing by venture capital funds," noted Rossa.

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