4.1.2007 / Michael Flock
Over $125 Billion of “Dry Powder”

At present, there is a surplus of private equity capital available and pressure from limited partners to deploy capital. Industry sources estimate that there is over $125 billion of private equity “dry powder,” which at current leverage multiples represents upwards of $350 billion in buying power. Private equity firms have become extremely competitive bidders, even against strategic buyers. In late 2003 and 2004, the volume of LBO transactions recovered from the trough of 2001 – 2002 and continues to remain at or near peak levels due to the surplus of private equity capital and strength of the debt markets.