Featuring the latest data, this extract from the Preqin Quarterly Update: Private Equity, Q2 2015 looks at the rising amount of dry powder in the industry and up-to-date performance statistics.
With the fundraising market remaining robust and average final close sizes climbing, dry powder has continued to increase. The level of committed capital available to private equity fund managers for investment is standing at a new high, at USD1.3 trillion (Fig 1). This is an 18% increase since December 2014, with over half of the increase in dry powder attributable to private equity real estate and buyout funds.
Fig 2 shows the median amounts called, distributed and remaining value by vintage year as of 31 December 2014. As expected, funds with recent vintages have distributed very little capital back to investors, but all have remaining values greater than the amount already paid in.
Plotting the median net IRRs by vintage year for North America-, Europe- and Asia & Rest of World-focused private equity funds shows interesting results (Fig 3). More recent vintage funds focusing on Europe and Asia & Rest of World have lower median net IRRs than their earlier vintage counterparts, whereas the performance of North America-focused funds displays the opposite trend. However, interim performance measures for these younger funds should be viewed in context and these metrics will change as the funds progress.
Similarly, Fig 4 shows that the most recent vintage funds have net IRR quartile boundaries similar to those for 2002-2004 vintage funds, suggesting the short-term performance of these funds is greater than those of interim vintage years.
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