Private equity funds continued raising vasts amounts of money in the first quarter,after just completing record-breaking fund-rasing in 2006. Private equity includes buyout and corporate finance funds, venture capital, mezzanine, and funds of funds.
In the first, quarter, 68 funds raised $44.3 billion, up 67 percent from the 46 funds that raised $26.6 billion in the first quarter last year, according to Dow Jones Private Equity Analyst.
In particular, the buyout side of the private equity industry raised a majority of the money, or $35.2 billion. As for venture capital, which focuses more on early stage investing, 22 funds raised $3.8 billion in the first quarter, falling from year ago period when $4.4 billion was raised.
If you don’t remember, in 2006, the private equity industry broke all previous records, raising $246.3 billion in 359 funds. In addition to what was raised in the first quarter, Dow Jones said it knows of 400 other funds trying to raise at least another $130 billion.
Look at the impact this kind of money can have on the industry. It stirs up rumors of companies — huge companies — like Home Depot, which has a market cap of $75 billion, being bought out.