Dry powder drives new PE trends

Author: Gemma Varriale | Published: 4 Feb 2015

The growing volume of unspent funds held by private equity (PE) firms is driving new trends in deals.

Known as dry powder, PE firms are thinking of new ways to invest this money which has already been committed by investors.

"Funds will likely be looking to put this money to use because they make money once they are invested," said Søren Fogh, Copenhagen-based partner at Gorrissen Federspiel, speaking at IFLR’s In-house Council Summit in London last month. "That will likely lead to higher prices as more money chases the same deals."

Matthew Dean, a partner with Willkie Farr & Gallagher added that there’s so much money chasing so few deals that the successful PE funds will have to find new strategies to compete . "The more creative PE funds are now going out and manufacturing deals, finding management teams and matching them together with business opportunities," he said.

While PE...