Clayton, Dubilier & Rice, one of the US's best-established buy-out companies, is struggling to meet its $3.5bn target for its seventh buy-out fund while rivals are setting new fundraising records.

The group, which hired Jack Welch, former chairman and chief executive of General Electric, as a special partner in 2001, held a $3.5bn (€2.9bn) final close on its sixth fund in 1999. However, losses between 1998 and 2000 have made institutional investors cautious about committing new capital to the partnership.