The global private equity industry raised $41.3 billion in the second quarter, with 82 fund closes, the lowest amount raised since the fourth quarter of 2003 when $38 billion was raised, according to a Preqin report.
Private equity funds raised $60 billion in the first quarter of 2010 and $53 billion in the fourth quarter of 2009.
U.S.-based funds raised the most capital during the second quarter, with 46 raising a total of $24.3 billion. Nineteen European funds raised a combined $8 billion and 17 funds elsewhere raised $9 billion.
Fourteen buyout funds raised the most with $13.9 billion, followed by five infrastructure funds raising $6.1 billion, 15 private equity real estate funds, $5.9 billion; and 24 venture capital funds, $4.4 billion.
The number of funds and their fundraising targets have dropped, with 1,522 funds seeking $560 billion worldwide, compared with 1,562 funds seeking $636 billion in the first quarter.
A Preqin news release stated that a June survey showed that 76% of private equity investors plan to maintain allocations during the next 12 months.
“While in previous years maintaining an allocation would require significant reinvestment of distributed capital from existing investments, the fact that distributions to investors have been so low means that investors have not had to invest in new funds at the same level in order to keep their allocations steady,” Tim Friedman, Preqin spokesman, said in the news release. “With market conditions improving, the churn of capital is starting to pick up, and this will have a positive impact on new fundraisings as investors seek to reinvest distributed capital.”