The $2.5 Trillion Question

Dry powder is now at a record high, but how will it be put to work?

The private equity industry entered the Covid-19 crisis with a mountain of dry powder, about $2.5 trillion in total, over $800 billion of which was earmarked for buyouts. That’s more than double of what the industry had during the 2008 recession.

And yet, fundraising continues. 

“There are large GP’s out seeking record amounts of capital for new fund vehicles,” says Graham Rose, a partner in Bain’s private equity practice. “Some headline GP’s,” he added, “have gone to market even in the midst of the Covid-19 impact.” 

I’ve worked with Graham for more than 20 years, and I invited him on the show to put these record breaking numbers in perspective. We dig underneath the headline figures to get to what’s driving those numbers.

“If you look back at ‘08, ‘09,” says Graham Rose, a partner in the Boston office, “and think about the early stages of that downturn, today feels like there is more latitude to raise.”

Source: Bain & Company

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