drypowderPE

Pitchbook’s Dry Powder in the USA Report

by

May 28, 2012

Pitchbook has published a new report on capital overhang trends in PE in the US. The graphic above illustrates that beginning with the 2008 vintage; the rate that capital is called down has been gradually slowing.

 

Funds raised from 1999 to 2007 held an average of 29% in unfunded commitments at the end of their third year. For the 2008 vintage, however, that number has risen to 38%, largely attributable to the rampant fundraising that occurred that year.

 

The amount of committed capital that firms fail to allocate during the typical five-year investing window now averages more than 10% and continues to rise. This phenomenon has created a bottleneck and slowed the rate of investment for subsequent vintages. The longer this trend continues, the deeper the problem will become. Just who has how much capital overhang or dry powder is shown in the table below.

Share on FacebookTweet about this on TwitterShare on Google+Share on LinkedIn