The amount of capital available for private fund managers to invest totaled $2.099 trillion as of the end of June 2018, up from $1.779 trillion at year-end 2017, according to the latest data from Preqin Ltd.
Private equity accounted for 62% of all available capital as of the end of 2018. While private equity's portion of the total amount of dry powder declined between 2000 and 2013 due to the rise of asset classes such as private debt and infrastructure, the last five years have seen a comeback for the sector.
Within private equity, venture capital represented 20% of dry powder in 2018, up from 13% in 2013.
In terms of geographic allocation, North America still has the lion's share of the available capital, but the proportion of the total dropped to 55% in 2018 from 62% in 2000. Asia, on the other hand, has seen an upward trend with 18% of the capital focused on the region in 2018, up from 9% in 2006. Europe remained consistent with about 23% of the total available capital.
Richard Stus, head of private capital research at Preqin, said in a release that while dry powder is mounting, fund managers are spending it at a faster rate, which should alleviate concerns of capital stockpiling. "In this context, burgeoning dry powder can be taken as a sign of an expanding and diversifying industry rather than one unable to put capital to work," he said.
He added that Asia may have played a part in the growth of available capital for private equity funds, as asset classes outside of private equity and venture capital in Asia "have yet to build much of a foothold."