Private Equity Funds Expand In Number Despite Headwinds - Research

Tom Burroughes Editor London 13 November 2009

Private Equity Funds Expand In Number Despite Headwinds - Research

The number of private equity firms has continued to expand this year despite the harsher economic climate, according to new data from Preqin, the research company.

Some 412 new private equity firms were set up around the world, as of October, bringing the total to 4,270. When private equity firms that do not raise distinct private equity funds are included, the figure is closer to 6,000.

The private equity industry has seen returns hit by the spike in borrowing costs during the financial crisis, and funds have taken longer to raise money than previously, creating significant reserves of spare cash to put to work.

The US remains the most developed country for private equity and this is reflected in its share of the number of firms headquartered there. North American firms represent 53 per cent of the total number of private equity fund managers worldwide, and the overwhelming majority of these are based in the US. It therefore comes as no surprise that the US is by far and away the leading country when it comes to the number of people employed within the private equity industry.

Out of the estimated 69,100 employees working in the industry worldwide, US-headquartered private equity firms employ an estimated 38,500 - well over half of the global total.

Six of the top 10 cities by private equity employment are in the US; London, Paris, Sydney and Tokyo complete the top 10.

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