Private equity has more than $1 trillion in unspent committed capital as fundraising has remained steady but deal volume has stayed relatively flat for three consecutive years, according to fresh research from private equity data provider Preqin. The aggregate value of buyout investments globally totaled $264.4 billion in 2011, $263.8 billion in 2012 and $265.8 billion year to date in 2013. More than 9 percent of dry powder is attributed to funds with vintages prior to 2008.
Preqin data indicates that current dry powder, capital committed to private equity funds but still yet to be invested, is at a record level, exceeding 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 $264.4bn in 2011, $263.8bn in 2012 and $265.8bn in 2013 YTD, provoking concerns of private equity firms’ ability to deploy all the capital they have raised from investors.
Other Key Facts:
- Current total private equity dry powder stands at $1,074bn as of 17 December 2013, compared to a previous high of $1,067bn witnessed at the end of 2008.
- Aggregate global private equity dry powder has seen a 14% increase over the past year alone.
- Capital available for investment in purely buyout opportunities stands at $397bn, notably lower than the $483bn high seen in December 2008.
- Distressed private equity and growth dry powder levels have seen significant gains, with the former increasing from $56bn to $74bn and the latter from $46bn to $76bn between December 2008 and December 2013.
- Over 9% 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.
For more information, see the fact sheet.