Much of the growth within the LBO fund category area can be attributed to booming interest in distressed-focused funds, which saw nearly $45 billion invested in 22 funds. That is almost three times the previous annual investment record of $16 billion set in 2006.
"With creditors tightening their belts, the days of easy financing are over and private equity investors are positioning themselves to capitalize when overextended companies fall into trouble in the months and years ahead," said Jennifer Rossa, managing editor of Dow Jones Private Equity Analyst. "Oftentimes, the best opportunity for investors to see sizeable returns is when overall market conditions are less favorable."
According to the newsletter's analysis, venture capital fundraising continued to account for a much smaller portion of overall fundraising than it did during the tech boom. In 2007, 141 funds raised more than $32 billion. Even so, that's up 19% from the $27 billion raised in 136 venture funds in 2006, as late-stage strategies capture more interest.
Nearly 10% of all capital invested in venture funds went to Technology Crossover Ventures, which raised $3 billion for its TCV VII LP fund focused on later-stage investments.
