NEW YORK, Oct. 6, 2006 (PRIMEZONE) -- U.S. private equity firms continue to raise money at a breakneck pace, with $172.2 billion raised in 253 funds at the close of the third quarter of 2006 -- an increase of about 72% in capital from this point last year, according to Dow Jones Private Equity Analyst, an industry newsletter that has been tracking capital flowing into this asset class since 1991.
The total this year has already exceeded the $162.5 billion raised in all of 2005 and is expected to handily surpass the record fund-raising of 2000, when $177.9 billion was raised. Private equity includes buyout and corporate finance funds, venture capital, mezzanine funds and funds of funds.
"If fund raising continues at the current rate of more than $57 billion per quarter, we are projecting that 2006 will end with as much as $225 billion collected in U.S. private equity funds," said Jennifer Rossa, managing editor of the Private Equity Analyst. "Private equity fund managers continue raising bigger funds in an effort to take advantage of more investment opportunities, in both public and private companies, around the globe."
The buyout side of the private equity industry is the primary focus of the boom, representing $118.5 billion of the total raised so far this year, or about 69% of all funds. Much of the increased fund raising this year has been driven by mega buyout funds of $10 billion to $15 billion in size. In fact, the six largest funds this year have raised a combined amount of $52.3 billion, accounting for about 30% of the total funds.
Venture capital firms, who were responsible for much of the capital raised during the record-breaking year of 2000, also are raising larger funds in 2006. But the industry remains well below the heights it hit during the bubble. Venture capital firms have raised $21.8 billion so far in 2006, about 18% more than was raised at this point last year.
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Private Equity Analyst (www.privateequity.dowjones.com), published by Dow Jones Financial Information Services group, is the leading provider of data, news and analysis for private equity professionals. Related products include the daily online newsletter LBO Wire and the online database, Private Equity Analyst Plus, a series of senior level executive conferences including the Private Equity Analyst Conferences (NY and London), the Private Equity Analyst Outlook Conference (NY) and The Limited Partners Summit series (NY, SF, Europe); cutting edge research reports on critical private equity topics such as terms and conditions, compensation and liquidity trends; and the most respected and referenced directories for the industry including Galante's Venture Capital & Private Equity Directory and The Directory of Alternative Investment Programs.
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