Warburg Closes At $11.2B, Short Of Target

Firm: Warburg Pincus LLC

Fund: Warburg Pincus Private Equity XI

Target: $12 billion

Amount Raised: $11.2 billion

Private equity firms moderated their fundraising expectations following the crisis, launching funds that in general were smaller than their predecessors, sister news service Reuters reported. Warburg’s previous fund, which had a $12 billion fundraising target, ended up raising $15 billion in 2007.

Warburg’s latest fund also had a $12 billion target. While it fell short of that, it is still larger than other mega private equity funds raised in the last six months, including Silver Lake’s $10.3 billion fund and Advent International Corp.’s €8.5 billion ($11.1 billion) fund.

For most private equity funds, fundraising remains challenging due to fierce competition. In the first quarter, 129 private equity funds reached a final fundraising close, raising a total of $67 billion, compared with 203 funds that raised $79 billion in the first quarter of 2012, according to market research firm Preqin.

Sentiment, however, appears to be improving as institutional investors, particularly pension funds with huge liabilities, look for outsized returns that exceed the broader market. Carlyle Group LP co-founder David Rubenstein said on May 9 that the firm could exceed its $10 billion fundraising target for its latest flagship U.S. buyout fund.

New York-based Warburg Pincus said on May 10 that investors in the new fund, Warburg Pincus Private Equity XI, include public and private pension funds, sovereign wealth funds and wealthy individuals, with a significant number of the new investors coming from outside the United States. The firm reached a final close of the fund within one year of closing the fund’s first part, in line with its initial plan.

“This successful fundraise, in a challenging environment, was driven by strong support from both existing and new investors,” Warburg Pincus co-President Charles Kaye said in the statement.

Founded in 1966, Warburg Pincus has more than $40 billion in assets under management and a portfolio of more than 125 companies.

Soyoung Kim and Greg Roumeliotis are correspondents for Reuters in New York.