Market at a glance: Warburg Pincus follows herd with $15B

Warburg Pincus last week announced that it has closed its 10th fund with $15 billion, or nearly twice what it secured for its ninth fund in 2005. The New York-based firm makes venture capital, growth equity and leveraged buyout investments out of the same general fund, which invests worldwide.

The fund is $3 billion more than what the firm was targeting when it began fund-raising in May 2007, which fits the recent mega-firm pattern, where Bain Capital, Kohlberg Kravis Roberts & Co. and other firms have raised record amounts despite a paucity of new deal opportunities.

Warburg Pincus declined to comment on the fund, but what’s uncertain is how any private equity firm can claim that it requires the same amount of funds, or 25% more than its last vehicle, in today’s economic climate. Even if Warburg plans to do the exact same number of deals, many of the transactions will require less cash due to decreased valuations.

Intrerestingly, Warburg raised fund X thanks in part to its highest-ever level of limited partner re-ups.

Warburg Pincus Private Equity X’s close at $15 billion ($6 billion of which was raised this year) was the biggest fund-raising news of the past week. Buyout firms, year-to-date have now raised $82.8 billion.In addition to Warburg Pincus, Advent International raised about $1.5 billion for Advent Central and Eastern Europe IV. The fund was targeted at about $1.2 billion.

AIG Investments

AIG Capital Partners Inc. held the final close of AIG Brazil Special Situations Fund II with nearly $692 million in commitments. The fund exceeded its initial target, which was not disclosed. AIG Brazil Special Situations Fund II is the firm’s second-generation private equity fund focused primarily on Brazil. The fund can also pursue investments in Mexico, Colombia, and other Central and South American countries. So far, the fund has made three investments totaling $112.5 million.

Deal activity

Meanwhile, U.S.-based LBO shops closed nine control-stake transactions during the past week, according to Thomson Reuters (publisher of PE Week). Only three transactions had disclosed prices that totaled $520 million.

The largest LBOs of the past week were Castle Harlan Inc.’s acquisition of Anchor Drilling Fluids USA Inc. from American Capital Strategies Ltd. for $250 million, and an investor group’s purchase of Nike Inc.’s Nike Bauer Hockey USA Inc. business for $200 million. The group includes Kohlberg & Co.

Year-to-date buyout deal volume rose to $47.6 billion. —Dan Primack and Eamon Beltran