Private Equity Fundraising Drops

The dollar value of private equity deals closing in the first quarter of 2010 dropped, but the number of deals increased from 2009.

During the first quarter of 2010, U.S. private equity fundraising dipped to $17.6 billion raised by 97 funds, an 8 percent drop from the same period last year, according to the Dow Jones LP Source report.

Dow Jones LP Source said that $19.1 billion was raised by 75 funds during the first quarter of 2009 and $65.9 billion was raised by 108 funds during same period in 2008.

“The fundraising total is negligible, but the story behind the numbers is telling,” said Jennifer Rossa, managing editor of Dow Jones Private Equity Analyst, in a release. “Many commitments made during the first quarter were to funds early in their fundraising process, unlike the same period last year when many closes were holdovers from 2008. We are seeing that limited partners are willing to put what they have to work, though they may not have much to invest.”

Leveraged buyout and corporate finance funds claimed the majority of capital put into private equity funds. These funds raised $9.7 billion for 39 funds, a slight increase from the $9.6 billion raised for 27 funds during the same period last year, reported the Silicon Valley/San Jose Business Journal.

In another sign of pressure on private equity, Apollo Group and Cedar Fair have terminated their $2.4 billion merger deal because the deal did not have enough support from the them-park operator's shareholders, who considered the offer too low.

The deal, announced in December 2009, was criticized by several of Cedar Fair's largest shareholders who said the $11.50-a-share offer was too low.

More on the Dow Jones report is available from the Silicon Valley/San Jose Business Journal.

More on Cedar Fair and Apollo Group is available from the Cincinnati Business Courier.