Rising interest rates, banking trauma, government spending, and geopolitical strife have caused private money to hit the pause button when it comes to investing. CI has reported repeatedly that private equity and venture capital have cratered in the last year. And it makes sense. Why take the risk when you can earn 5% almost risk-free? While some private ventures are getting funded and the IPO door is creaking open, it seems, S&P Global Market Intelligence is reporting that private equity has hit an all time record in “dry powder” at $2.59 trillion.
Year to date, S&P reports a deal value decline of 35.6% in comparison to 2022 (up to November 30th).
Almost 22% of the cash on hand was held by 25 private equity firms – 19 located in the United States.
Apollo led the pack with $55.14 billion in uncommitted capital available. They were followed by KKR at $43.24 billion. Luxembourg-based CVC Capital Partners came in third at $39.4 billion. CVC made just 2 investments in the past 12 months.
So when will the dam break? Probably when interest rates are firmly parked and prepped to move lower.
