New York - Despite woes in the buyout market, private equity fundraising continued to hold its ground during the first half of this year, dropping only slightly from 2007's record levels, according to a new report by Dow Jones Private Equity Analyst.

In the first six months of 2008, U.S. private equity firms raised $132.7 billion across 185 funds, down 3% from the $137.2 billion raised by 199 funds during the first half of last year.

"For first time since 2003, we've seen year-over-year fund-raising actually decline as some of the bigger firms -- Blackstone Group, Carlyle Group and Madison Dearborn Partners -- ran into delays raising capital for their latest buyout funds," said Jennifer Rossa, the managing editor of Dow Jones Private Equity Analyst.

"The weakness in the buyout industry, however, has been offset by strong fund-raising by mezzanine funds and a decent showing by venture capital funds."

While leveraged buyout (LBO) fund-raising declined 20%, mezzanine fund-raising set a new first half record with $24 billion raised and VC fund-raising increased by 15%.

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