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US second quarter fundraising almost matched by cash hand backs

The volume of US venture capital raised in the second quarter was almost matched by the amount of cash handed back to limited partners. New figures showed 30 funds raising $4.6bn in the second quarter at the same time as $3bn being returned to investors.

The figures for the latest quarter compare reasonably favourably with the first quarter, when 32 firms raised $3.5bn, but were inflated by the inclusion of Warburg Pincus' massive $2.5bn final closing, according to VentureWire.

‘Not counting Warburg, 29 venture funds closed just over $2bn last quarter. That's a solid number of new funds, but it is clear the amount of available capital for those funds has decreased significantly,' said Ken Andersen, editor of VentureWire.

Once again, the life sciences sector proved one of the most active. There were 17 funds raised in the second quarter that planned to dedicate at least part of their funds to investments in biotechnology, medical technology, and healthcare.

There was also a continuation of the recent trend for greater geographic diversification. Roughly half of all the funds raised in the latest quarter said they would focus outside the US, while a number said they planned to focus on less traditional domestic destinations for venture capital like the southeast.

Most of the new funds had an early stage focus. Two-thirds, worth about $1.3bn, said they would focus mainly on investing in young start-ups.

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