Dry Powder At Record Level


    Current dry powder ‒ capital committed to private equity funds, but still yet to be invested ‒ is at a record level, says Preqin. Its data shows the level has exceeded the previous record high seen before the onset of the global financial crisis in 2008. While fundraising throughout 2013 has seen notable growth and there has been an increase in the number and value of exits, deal volume has stayed relatively flat for three consecutive years. The aggregate value of buyout investments globally totalled $264.4 billion in 2011, $263.8 billion in 2012, and $265.8 billion, provoking concerns about the ability of private equity firms to deploy all the capital they have raised from investors. Current total private equity dry powder stood at $1,074 billion as of December 17, compared to a previous high of $1,067 billion witnessed at the end of 2008. Aggregate global private equity dry powder has seen a 14 per cent increase over the past year alone. Over nine per cent of current dry powder is attributed to funds with vintages prior to 2008. Based on an industry average five-year investment period, this capital should theoretically have already been invested and may expire unless investors grant these funds investment period extensions.