Private equity fund raising slows

A new study has found that only 16 per cent of the target amount companies intended to raise was achieved.

Private equity players are finding it harder to raise funds in the region, according to a new report on private equity and venture capital. The report, compiled by accounting firm KPMG in conjunction with the Gulf Venture Capital Association, found that only 16 per cent of the target amount companies intended to raise was achieved in 2008, compared with 65 per cent in 2005. "There's a notable shift in fundraising in the industry; in 2008 there were fewer funds that raised larger amounts," said Vikas Papriwal, a partner in KPMG's private equity and sovereign wealth funds practice and a contributor to the report.

He added that major private equity houses in the UAE faired better last year than smaller players. The highlight was Abraaj Capital's US$2.6billion (Dh9.5bn) fundraising last September. The report found that of the target amounts announced since 2006, $11.7bn was still outstanding. However, regional private equity fund managers did raise a total of $6.4bn in 2008, up more than 10 per cent compared to 2007 and more than double the amount raised in 2005.