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$1.78 trillion in private equity dry powder remains near record high


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$1.78 trillion in private equity dry powder remains near record high

The global private equity industry collectively holds $1.78 trillion in dry powder, or capital available for investment, an increase of 35% since September 2021 and near the all-time high of $1.81 trillion recorded in late January, according to Preqin estimates, which exclude fund of funds, secondaries, hybrid and hybrid fund of funds.

The top 25 firms collectively hold about $460.12 billion, or one-quarter of the total, a result of several factors including an investor preference to allocate capital to mostly large, well-established firms during the pandemic.

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U.S. firms dominate the top 25, and Blackstone Inc. is number one with about $45.41 billion in dry powder in its private equity strategies. The firm has 18 funds in market, according to Preqin, including the sector-focused Blackstone Energy Partners III LP, targeting $4.5 billion.

Blackstone reported raising $270 billion across all strategies in 2021. "From a fundraising perspective, I expect our strong momentum to continue in the current environment," Chairman, CEO & co-founder Stephen Schwarzman said on the firm's Jan. 27 earnings call. "In the institutional channel, LPs are increasing their allocations to alternatives ... [and] concentrating capital with fewer managers, which favors Blackstone."

KKR & Co. Inc. is second with $39.26 billion awaiting deployment. KKR, which has 13 funds in market, had two of the largest fundraises last year, pulling in $18.5 billion in five months for its buyout fund, KKR North America Fund XIII SCSp, as well as $15 billion for its KKR Asian Fund IV.

Two European firms are among the top four. Ardian ranks third with nearly $26.47 billion and is in the market with three funds while CVC Capital Partners Ltd. holds $25.92 billion in dry powder.

Hellman & Friedman LLC, which has about $22 billion to invest, closed its Hellman & Friedman Capital Partners X LP on $24.4 billion in 2021, which was last year's largest private equity fundraise globally, according to Market Intelligence.

The scramble among fund managers to put the capital to work factored into a surge of deal-making in 2021, a trend that is expected to continue this year.