Description

Key Themes and Findings:

• Definition of Dry Powder: The document defines "dry powder" as the "Value of PE funds raised but not yet invested."
• Significant Volume of Dry Powder: Pitchbook data indicates that at the end of Q1 2024, dry powder in Europe was €300 billion.
• Middle Market Focus: Approximately 50% of the funds raised fall into the "middle market" category (£100m to £5bn funds), translating to roughly £150 billion that "𝗵𝗮𝘃𝗲 to be invested within a 5 year window."
• Recent Investment Restraint: The "increased cost of debt and reduced valuations" in 2023-2024 forced investors to hold onto cash. They shifted to "minority deals and 'less risky' portfolio acquisitions" instead of larger investments.
• Expected Acceleration of Investment: "As the M&A market opens up this dry powder will be invested over a shorter time frame."
• Secondaries Market Activity: The document predicts an increase in "Secondaries (PE selling to PE)," which will free up PE house resources for "new, larger platform investments."
• New Fundraising Trends: "New fundraising activity is increasing for the first time since 2021," especially for smaller funds (£50-£100m) focused on "first time (primary) PE deals (£5-£15m equity cheques)."
• Unwinding in 2025: The document asserts that the dry powder situation has "already started to unwind in 2025..."

Find that on Linkedin here: https://www.linkedin.com/posts/charlotteashton_is-dry-powder-really-a-thing-this-question-activity-7289605749205356545-NMjs?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAB93fwBBqpG4EyWpoMTT0FThJ1EDPH5rg8

DISCLAIMER: The BizNexus Roundup podcast features AI hosts whose analysis is based entirely on pattern recognition and reports created by actual human experts. While our hosts can process vast amounts of data, they've never actually closed a deal or sat in a boardroom.

Our discussions draw from publicly available sources and expert insights, but we strongly encourage listeners to consult the original documents and reports referenced in each episode for the complete context and analysis. The AI hosts' market predictions and deal assessments, while data-driven, are no substitute for professional human judgment and due diligence.

For actual M&A advice, please consult qualified human experts and always go to the source materials to get the full story.

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Show Credits

Intro Music Artist: DJ Freedem | Track: Pretty Boy