Looking Back

In these sparse times, just about any fundraising able to net more than $1 billion would be considered a crowning achievement, regardless of how long it took. And if a fund today were to close with, say, $5 billion in capital commitments, that vehicle would represent one of the great capital-raising feats of its vintage class.

Only eight LBO funds that have been soliciting capital thus far in 2010 had or have targets of $5 billion or more, according to Buyouts. None have held final closes. (See editor’s note at end of story).

By contrast, the first quarter of 2007 was a completely different animal. In those early days of the year, no fewer than 12 LBO funds were already in the market with targets of at least $5 billion, and half of those were actually aiming to raise 11-figure vehicles, according to Buyouts. Among those that saw final closes in the first quarter were Leonard Green & Partners’s $5 billion targeted fifth fund, which wrapped up with $5.3 billion in capital commitments, and Providence Equity Parnters’s $12 billion-targeted sixth fund, which raised $12.1 billion before its close. The latter vehicle was indicative of the time—having raised more than $11.9 billion in the Q1 2007 alone.

But perhaps no other firm was as tapped in to the fundraising exuberance of the day as The Blackstone Group. In May of 2007, Blackstone—not content with the roughly $15.6 billion it had already tapped from LPs in 2006—was in the market to raise a $6.4 billion supplemental pool of capital to add on to its fifth fund. Blackstone reopened Fund V, with the permission of limited partners, after rivals surpassed the New York firm’s earlier amount with larger funds of their own.

GS Capital Partners, the buyout arm of investment bank Goldman Sachs, at the time, held the title of world’s largest fund, with its $20 billion sixth fund that closed in April 2007, while Kohlberg Kravis Roberts & Co. had reportedly already closed on $16.4 billion on its way to what ultimately became the $17.6 billion KKR 2006 Fund.

The expressed goal of Blackstone was to raise slightly more than $22 billion for its fifth fund (an amount that would give it claim to the largest LBO fund in history by a margin of about $2 billion), a source with direct knowledge of the situation told Buyouts at the time. In the end, Blackstone missed its goal by a mere 1.4 percent, and finally wrapped up Blackstone Capital Partners V, with $21.7 billion in September 2007. To date, no fund has surpassed that amount.

Editor’s Note: A previous version of this story listed CD&R Fund VIII, which raised a total of $5 billion, as having held its final close in 2010. The fund actually closed in 2009.