Over the last few years, there has been a spectacular accumulation of PE dry powder. The U.S. PE capital overhang steadily increased each year from $197 billion in 2004 to $521 billion in 2009. However, it crested in 2009 before dropping to $477 billion as of September 30, 2010. About three-fourths of that dry powder is sitting in funds with vintage years from 2007 to 2009. While the large amount of dry powder is allowing PE firms to pursue bigger, more expensive companies, it has also contributed to a tough fundraising environment, as limited partners wait on distributions before committing capital to new funds.
To learn more, download our U.S. PE Capital Overhang Brief by clicking here.