European fund-raising halved in Q1: Strong 2005 gives way to natural slowdown

European venture fundraising fell 48% during the first quarter of 2006 as nine firms raised $605 million, down from the 11 firms that raised $1.2 billion during the same period last year, according to a report by Dow Jones VentureOne,

Private equity firms raised 11% more during the first quarter, despite the dip in venture activity. European PE firms raised $6.3 billion in the first three months of 2006, up from $5.6 billion during the same period last year.

The drop in venture fund-raising may be a reversion to normalcy after a particularly strong first quarter in 2005. European venture funds raised only $215 million during the first quarter of 2004, less than a fifth of what was raised during the same period in 2005.

“This quarter’s decline may simply be a natural slowdown,” says Steve Harmston, a researcher of the study.

Via Venture Partners raised $174 million for its Fond I K/S, making the Denmark-based fund the biggest to close during the quarter.

Pond Ventures, based in the United Kingdom, raised the next largest fund, its third, which weighed in at $155 million.