2009 Fundraising Predictions Don’t Look Pretty

Speculation is futile, this we know. But that won’t stop us from trying. Here’s a taste of predictions for 2009 fundraising numbers, from panelists at yesterday’s PEA Outlook Conference.

First I’ll give you last year’s total: $264 billion.

Now I’ll give you my prediction: $186 billion. I made this on January 1, and perhaps I was feeling hopeful for the new year, since the Dow was up. I’m now realizing that I probably need to make some revisions.

And now, I’ll give you the expert predictions, and they don’t look pretty:

  • Michael A. Greeley, General Partner, Flybridge Capital Partners: “One third of last year’s numbers.” That’s $87.78 billion.
  • Steven N. Costabile, Managing Director & Global Head, Private Equity Funds Group, AIG Investments: Less than $100 billion.

And lastly, in no order, from the following panelists: Jonathan Axelrad of Goodwin Procter LLP, Hussein Khalifa of MVision Private Equity Advisers, Gregory V. Stento of HarbourVest Partners, and Brad Young, of Altius Associates (in no particular order):

-1/3 to ½ of last year ($87.78 billion to $133 billion).
-Less than $100 billion.
-$133 billion.
-$90 billion.

I’m surprised at how low these are, although maybe I shouldn’t be. I assumed every fund would re-up and simply not take on new relationships or increase commitments. I thought that seemed fair so I shaved off last year’s numbers by around one third. If these guys are anywhere close (and they’d know better than me!), I’m afraid I’ll be way off. It’s more likely that the gentle scale-back I referred to happened in 2008; in 2009, we’ll see LPs cutting back “to the bone.”

Anyone else have an educated guess?