Private equity fundraising, driven primarily by growth in mezzanine, distressed debt and buyouts, grew 16% during the first half of 2013, experiencing the strongest growth since 2008. As LPs face a volatile stock market and low interest rates, “all roads lead to private equity,” Jasper Ridge Partners Managing Partner Rick Hayes said, predicting that money will continue to filter into the asset class.  In a recent report from Coller Capital, roughly a quarter of the 140 limited partners surveyed indicated they planned to increase their allocations to private equity over the next 12 months. Those increased allocations could bolster some managers as LP portfolios stabilize and private equity distributions continue to flow back to investors. General partners returned $115 billion to limited partners during 2012, beating out a record $93 billion of distributions for 2011, according to Andrea Auerbach, managing director at consultant Cambridge Associates.  The increased liquidity opens the door for more fundraising—with particular interest in investing in frontrunner funds.

Among the standouts, Silver Lake, in the midst of negotiating its $24.4 billion offer for Dell Inc., wrapped up its fund with $10.3 billion, while Warburg Pincus held a final close on $11.2 billion for its flagship multistrategy vehicle and Riverstone Holdings raised $7.7 billion for its first energy fund independent of Carlyle Group. Lone Star Funds closed its latest distressed vehicle with more than $5 billion. Crescent Capital Group raised an additional $1.79 billion during the first half of the year for its sixth mezzanine partnership. Abry Partners and Plexus Capital were among the small and midcap managers that reached their targets during the first half, while AEA Investors and Huntington Capital chipped away at their respective goals. Highbridge Principal Strategies closed its sophomore mezzanine fund with more than $5 billion, more than double the $2.1 billion raised in 2008 for its debut fund. Others, including Marlin Equity Partners, H.I.G. Capital and KPS Capital Partners (raising $3.6 billion in around six months), stood out for the speed at which they raced to a closing. See full article here. [1]

A burgeoning number of generalist private equity investors have been bidding on deals in the energy sector, according to a document from Simmons & Co. seen by LBO Wire. Kayne Anderson Capital Advisors, White Deer Energy and Yorktown Energy Partners benefitted alongside Riverstone from the seemingly ceaseless thirst for energy funds. American Capital, American Securities, Bain Capital, Friedman Fleischer & Lowe LLC, Rhone Capital LLC, Rock Hill Capital Group, and Summit Partners, are all looking to invest more actively in the energy services and manufacturing markets, according to the document from the energy-focused investment bank. Within the corporate finance sector, certain specialized strategies, particularly those focused on the energy industry, continued to elicit strong demand from limited partners. “There’s a change in the mindset where energy is now considered a growth business,” Pine Brook Partners Managing Director Michael E. McMahon said. “It’s a view of energy in the U.S. as ‘Saudi America,’ rather than a view of energy as a cyclical business that you should stay away from.” See full article here. [2]