Definition/Description
“Keep your powder dry” (New York Times, February 1997). Attributed to Olivier Cromwell at the Battle of Edgehill in 1642, this maxim has been rephrased and reused in various situations to mean “wait for taking action, but be ready to take action if it is necessary” (Cambridge University Press). In a private equity fund, the dry powder refers to the part of the capital which is committed to the fund by investors (the limited partners or LPs) and that remains unused and yet to be invested by the general partner (GP) of the fund. In other words, dry powder refers to the excess cash, unspent capital, or unused capital in a private equity fund that is available for investment purpose.
Introduction
Global assets under management (AUM) in private equity reached $9.3 trillion at the end of September 2022, a threefold increase over the last decadeFootnote 1(Source: Preqin Pro,...
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Notes
- 1.
The US private equity AUM reached $4.7 trillion end of September 2022, consisting in an increase of a factor 2 over the last decade.
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Lambert, M., Scivoletto, A. (2023). Dry Powder in Private Equity. In: Cumming, D., Hammer, B. (eds) The Palgrave Encyclopedia of Private Equity. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-38738-9_93-1
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DOI: https://doi.org/10.1007/978-3-030-38738-9_93-1
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