NEW YORK: Private equity firms are likely to raise, more than 33 per cent they lured last year, to over USD 300 billion in 2011 worldwide as the global economy recovers, according to a study.
“We are expecting fund raising to exceed USD 300 billion in 2011, with a more dramatic increase coming towards the end of the year as top quartile managers close significant funds that have been launched recently or are in the pipeline,” Preqin Head of Communications Tim Friedman said.
According to the report, conditions in 2011 appear far more encouraging after PE players faced a challenge in raising funds in 2010. During the year, a total of 484, Private Equity (PE) funds achieved a final close in 2010, raising just USD 225 billion, the lowest aggregate amount for six years.
Asia and the rest of the world focused funds accounted the lowest amount, with 118 such funds raised a total of USD 41.1 billion in last year.
As for the Europe-focused funds, USD 50.2 billion fund was collected by 122 such funds in the year 2010, while North America-focused funds garnered a total of USD 134.6 billion through 242 private equity funds.
On an overall basis, fund raising performance of private equity firms in 2010 was dismal, although there are many individual success stories like buyout funds raised the most capital during the year, with 88 such funds raising an aggregate USD 68.5 billion.
Besides, results for infrastructure were positive in 2010. As 25 such funds closed globally raising an aggregate USD 27.3 billion in capital commitments, suggesting the sector is enjoying something of a recovery following a poor year in 2009.
Looking forward, conditions in 2011 appear far more encouraging as 54 per cent of investors plan to invest more capital in 2011 than 2010, with only 15 per cent investing less. Market conditions are improving, and with deals and exits occurring at the highest levels for some time, investors will have to increase investments to maintain allocations.