U.S. dollars
U.S. dollars REUTERS

Fundraising by private equity firms globally is expected to increase 33 percent to over $300 billion in 2011 compared with last year, according to a study.

We are expecting fund raising to exceed USD 300 billion in 2011, with a more dramatic increase coming towards the end of the year as top quartile managers close significant funds that have been launched recently or are in the pipeline, said Tim Friedman, head of communications, Preqin.

The report said that conditions in 2011 to be encouraging for PE players following a challenging last year. In 2010, a total of 484 PE firms raised about $225 billion, the lowest amount since 2004.

The funds focused on Asia and the rest of the world stood at the bottom in 2010, with 118 of such funds raising $41.1 billion.

While 122 Europe-focused funds collected $50.2 billion in 2010, 242 North-America focused funds raised $134.6 billion.

The largest fund to close in 2010 was Blackstone Capital Partners VI, a buyout fund that raised a total of $13.5bn, Preqin said.

“Fundraising in 2010 turned out to be just as challenging as many feared. Although there are many individual success stories, on an overall basis fundraising levels were extremely low,” said Tim.

Besides, results for infrastructure were positive in 2010; 25 such funds closed globally raising an aggregate $27.3bn in capital commitments, suggesting the sector is enjoying something of a recovery following a poor year in 2009.

Looking forward, conditions in 2011 appear far more encouraging. 54 percent of investors plan to invest more capital in 2011 than 2010, with only 15 percent investing less. Market conditions are improving, and with deals and exits occurring at the highest levels for some time, investors will have to increase investments to maintain allocations, Tim added.