If there were ever a way to measure the extent to which an industry has lost the faith of its investors, for private equity it could be the latest report by London-based consultancy Preqin.

Continuing the bad news from the previous two quarters (as reported by AsianInvestor in April and January), in the second quarter of 2010, the PE industry raised $41.3 billion worldwide based on 82 fund closings, the lowest quarterly total since 2003.

Of these, non-US/European funds (mostly in Asia) accounted for 17 funds that successfully closed, raising $9 billion. This is about the same as Europe. The US has seen the lion's share of PE fundraising activity.

Although venture funds comprised the greatest number of new funds (24), the biggest share of assets went to buyout strategies ($13.9 billion) and infrastructure funds ($6.1 billion).

Anecdote suggests this should be a good time for the asset class to attract assets, given the need to find long-term assets that generate alpha and investors' shunning of funds of hedge funds.

Preqin suggests this state of affairs reflects investors' desire to maintain current asset allocations.

"While in previous years maintaining an allocation would require significant reinvestment of distributed capital from existing investments," says Preqin's Tim Friedman, "the fact that distributions to investors have been so low means that investors have not had to invest in new funds at the same level."

Market conditions are improving, while many brand-name PE firms have delayed new fundraisings, adds the report. Friedman says fundraising will pick up later this year.

But that doesn't address the poor performance that many private-equity funds have delivered. Coller Capital's recent data suggests returns have in fact been lousy. This is probably why so many new funds have been shelved, and why existing marketing campaigns are faring so badly.