Kohlberg Kravis Roberts is the exemplar of megafirm fundraising remaining feverish despite the lack of liquidity in the market and quasi-cessation of megadeals.
The private equity firm is currently raising $30 billion (€20.4 billion) across two funds: Its KKR 2006 fund is targeting $18 billion, three times the size of its previous fund, while its third Europe buyout vehicle is raising €8 billion, according to Probitas Partners’ 2008 Private Equity Deskbook.
But KKR is far from solitary in its vast fundraising activities.
The Blackstone Group is raising $24 billion across three funds. After closing the largest private equity fund ever raised on $21.7 billion in August 2007, Blackstone is raising a fund of similar size. Blackstone Capital Partners VI, which began fundraising in late 2007 or early 2008 according to media reports, has a target of $20 billion. The firm is raising a $1.5 billion mezzanine fund and a $2.5 billion distressed fund as well.
As PEO previously reported, TPG is raising $18 billion for TPG Partners VI, up from the $15 billion raised for TPG Partners V.
The Carlyle Group intends to raise at least $10.1 billion across six funds, according to Probitas. Its fourth energy fund in affiliation with Riverstone Holdings is targeting $6 billion; Carlyle Asia Partners III is targeting $2 billion; Carlyle Middle Eastern Fund is targeting $1 billion; Carlyle Mezzanine Fund II is targeting $600 million; distressed debt and equity vehicle Carlyle Strategic Partners II is targeting $500 million; and Carlyle Europe Technology Fund will be targeting a yet to be determined amount.
Meanwhile Bain Capital is raising roughly $20 billion between its tenth buyout fund targeting $16 billion, its third European fund, which is targeting roughly $4 billion and an Asia fund targeting approximately $1 billion.
Apollo Investment Fund VII is also targeting $15 billion, while Warburg Pincus Private Equity X held a first close on $9 billion in October 2007 and is targeting $12 billion, as previously reported on PEO.
Furthermore, megafirms continue to announce deals in excess of $1 billion. KKR’s most recently announced US investment was the $1.25 billion purchase of Legg Mason convertible senior notes in January 2008. Also in January, Blackstone agreed to acquire Performance Food Group in partnership with Wellspring Capital Management for $1.3 billion. And in November 2007, TPG agreed to acquire Canadian drug firm Axcan Pharma for $1.3 billion.
It remains to be seen, however, whether all these deals will close as many multibillion deals have been renegotiated or dropped in recent months due to credit conditions.
GSO Capital Partners, newly acquired by Blackstone, recently walked away from a $1.1 billion acquisition of packaged ice company Reddy Ice, for example. The deserted deal joins a long list of others including Cerberus Capital Management’s $6.6 billion buyout of United Rentals and Silver Lake’s and ValueAct’s $3 billion buyout of data company Axciom.
The firms mentioned in this story either declined to comment or had not returned calls at press time.