Private equity funds raise less in third quarter

PRIVATE equity firms saw their fundraising efforts slashed by falling investor confidence as global economic woes deepened in the third quarter, new data shows.

Fundraising was “significantly down” on the second quarter, with final fund closes falling 45 per cent to $44.8bn (£28.7bn), according to research provider Preqin. Just 97 funds closed in the third quarter, down from 175 in the second.

Despite the headwinds, investors remained keen to invest in private equity, it found, with two-thirds of those interviewed for studies in June and August planning to plough more capital into funds in the next year.

Preqin spokesperson Helen Kenyon said fundraising had been “extremely challenging” in the third quarter, with just $8.9bn raised in September.

She said investors were showing signs of “approaching new private equity investments with extreme caution” but added that most “intend to remain active in the coming months and over the longer term.”

Buyout firms raised most capital in the third quarter, sharing $14.4bn between them. Some even beat their targets, such as the Berkshire Fund VIII, which closed in July at $4.5bn, over its $4bn target.