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
"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.