The number of active private equity firms decreased last year for the first time since 1995, to 4,130 firms from 4,180 firms in 2009, according to a Preqin report on Tuesday.
There were fewer new private equity firms as well as more firms that became inactive; Preqin considered any firm that had failed to close a new fund in 10 years to be inactive.
There were fewer firms “due to the recent downturn and a significant number of firms becoming inactive … particularly venture capital firms established during the dot-com boom that have not been successful in raising any further venture funds since,” wrote Sam Meakin, Preqin senior analyst, reporting the results in Tuesday's edition of the Private Equity Spotlight, a monthly Preqin online publication.
The number of new firms decreased to about 130 in 2010, from the sector's peak of 400 firms in 2007. More than 180 firms became inactive in 2010, of which 140 were venture capital firms, according to Preqin.
Tim Friedman, Preqin spokesman, could not be reached for further comparison data by press time.