One of the largest private equity funds raised since the 2007 crisis has been put together by Warburg Pincus LLC. The fund is now valued at US$11.2 billion and is a clear indication of investor demand for high yield offerings during a time of record low interest rates.
Private equity firms have curbed their fundraising expectations after the recession and have launched funds that were smaller in amount compared to previous fundraising campaigns. Warburg's previous fund had a US$12 billion fundraising target had become US$15 billion just before the market crash in 2007.
The latest fund also had a similar US$12 billion target but it was below that amount but still larger compared to the fundraising amounts by other hedge fund firms, such as Silver Lake's US$10.3 billion fund and Advent International's Eur8.5 billion or US$11.1 billion.
The largest fund raising since the crisis was done by the Blackstone Group LP, which raised the amount of US$16 billion after four years of fundraising. This indicates the challenge that remains ahead of future activities for fund firms. There is also increased competition between the firms as the market contraction still has not corrected itself. Of the 129 private equity funds currently in operation, about US$67 billion was raised, lower than the 203 funds that were running to raise US$79 million in 2012's first quarter.
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