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Warburg Pincus £7.5bn fund play
Robert Lea, Evening Standard22.04.08
Top US-based private-equity house Warburg Pincus has raised $15 billion (£7.5 billion) for a new global buyout investment fund to take advantage of the cratered valuations of hobbled banks and financial firms.
But it warned the credit crunch is causing problems for rival funds attempting to attract money. Chief executive Joseph Landy said the original fund target had been $12 billion and, despite exceeding that, fund-raising is becoming more difficult.
"Demand was absolutely overwhelming when we started fund-raising a year ago but once we moved into the autumn and up to this spring, we have seen the allocation to private equity become much tighter," he added.
Warburg Pincus's funds could be in part targeted at credit-crunch victims.
"We see some of the dislocation in the financial services industry as a huge opportunity but we are looking at a five- to seven-year timeframe for these investments," said Landy.
The firm is likely to steer clear of banks' distressed packaged-up debt.
