Orange County Register

The number of private equity investments in companies declined 68% in the first quarter and the amount invested plunged 75%, says PitchBook Data, a New York research firm that focuses on the private equity industry.

The news is further evidence of the difficulty that even profitable companies have raising money or providing an exit for their investors during this recession.

Another fact that spells trouble down the road is that money raised by venture capital funds in the first quarter dropped 64% to $2.4 billion, according tothe Dow Jones Private Equity Analyst. Only 23 funds raised money compared to 57 a year ago, so maybe a lot of VCs are sitting on their money for good deals later.

“PitchBook’s analysis shows despite having raised record amounts of capital over the past
two years, private equity investor are still waiting on the sidelines for the current economic conditions to stabilize, the credit markets to return  and valuations to adjust before they really get back to doing new deals,” said PitchBook CEO and founder John Gabbert.

Among PitchBook’s findings:

• The $12.8 billion inested in the first quarter was a record low and compared to $52.7 billion in the same period a year earlier. The recorld high was $177 billion invested in the fourth quarter of 2007.
• The current freeze in the credit markets has dramatically reduced the number of deals of more than $250 million to only 12% of first quarter investments. Most private equity investors will only make a minority investment or do acquisitions of middle-market companies.
• Only 188 investments were completed during the quarter, compared to 440 in the third quarter and 279 in the fourth quarter. Buyouts dropped 70%

Among the sharpest declines:

• No Q1 investments at all in restaurants, hotels and leisure; energy equipment or exploration; insurance; pharmaceuticals and biotechnology
• Service companies, - 99.73%
• Medical devices, -99.31%
• Transportation, -99.63%

Some industries had investment gains:

• Utilities, +3,126.89%
• Commercial banks, +71.45%
• Consumer nondurable product companies, +190.22%

Click here for more results.

Other deals and investments…

• Venture-backed firms can’t find buyers or go public
• O.C. eye surgery firm raises $22 million
• 2 O.C. firms involved in business buyouts
• Breast-cancer test receives $15 million funding
• Luxury hybrid sports car maker raises $94 million
• Merger = survival for two O.C. firms
• O.C. company buys Peruvian firm
• O.C. company receives $5.5 million
• Two banks, one in O.C., merge
• Sales of O.C. businesses fall 45.2% in February

You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.