If your job last year was to raise private equity capital, you couldn't have been all that happy. Capital raising hit its lowest level since 2003, according to Dow Jones LP Source by way of VentureBeat, falling to $95.8 billion for 331 funds. In 2008, $300 billion had been raised across 508 funds, translating to a 68% year-over-year decline. Nobody was spared the struggle to raise funds, except secondary funds, which reported a 50% surge in fund raising.

The buyout fund, among the largest sectors in the private equity business, saw the capital raised fall 72.5%, from $195.5 billion in 2008 to a mere $53.7 billion in 2009. The largest buyout funds suffered most: only six funds with more than $6 billion under management raised an aggregate $14 billion. The year before, it took only 12 funds of this size to pull in a combined $75.2 billion in fresh capital.

The private equity market was hit hard by the financial crisis last year, but it's already on the road to recovery, according to a new report by Preqin (pdf).

From the first quarter to the second, this year, increasing returns and valuations have given investors a reason to hope, even though the industry's average return is down 24.1% for the 12-month period ending June 30, 2009. The negative return still outpaced the S&P 500, MSCI Europe and MSCI Emerging Markets indexes, the alternative investment research firm says, which returned -26.2%, -34.1% and -27.8%, respectively -- and the 12-month average improved from -30% for the year-long period ending March 31, 2009.

When you run across a stock with a 16% yield you at least have to check out the story. Prospect Capital Corp (NASDAQ: PSEC) is just such a company. Last week PSEC declared its 20th consecutive increased dividend.

In sharing my adventures and opinions in the investment world I try very hard to be candid without crossing the line into being a promoter. That said, I have been buying stock regularly over the last 12 months and buying on fear has paid off handsomely. As the market has catapulted upward since March the opportunities have diminished. However, I did add PSEC in the last month.

Earlier this year, private equity firm Fortress Investment Group (NYSE: FIG) had an IPO. Blackstone is also preparing its own offering and even got China to invest in its firm.

More and more, private equity firms are taking money off the table. The latest? It's Ares Management. The firm sold a minority interest for $375 million this week.

Who was the buyer? Well, Ares didn't disclose that. But, according to a press release, the buyer was a "long-standing client."

And Ares has some biggie clients. Examples include the Canada Pension Plan Investment Board and California Public Employees' Retirement System (CalPERS).

Based in Los Angeles, Ares manages has about $13 billion under management and has been in operation since 1997. The firm invests in a variety of areas, such as high-yield bonds, mezzanine debt, and bank loans.

Like other private equity firms, Ares has been growing at a staggering rate over the past few years. So, why not take some money?

Tom Taulli is the author of various books, including The Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.