Following the significant rise in the volume of estimated buyout dry powder globally between 2004 and 2008, which peaked at $487.6bn during 2008, buyout fund managers have seen a steady decline in the amount of capital available to them as dry powder. Preqin’s Fund Manager Profiles product reveals that $486.8bn of dry powder was available in December 2009 and currently, in January 2012, this figure stands at $370.3bn. Furthermore, the data shows an accelerating rate of decline with each passing year: a 0.16% decrease from December 2008 to December 2009; an 11.4% decrease from December 2009 to December 2010 and a 14.2% decrease from December 2010 to January 2012.
A breakdown by region shows that North America-focused buyout firms have the most available dry powder, accounting for 52% of the global volume, with $193.1bn as of January 2012. This is $47.4bn less than in December 2010. European-focused buyout fund managers have approximately $124.1bn of dry powder as of January 2012, down from its peak in December 2008 when buyout funds focused on this region had an estimated $167bn available. Buyout firms focused on Asia and Rest of World have an estimated $53.1bn worth of committed capital to draw from as of January 2012. This is a small decrease on the $53.9bn available as of December 2010, though the region’s proportion of the world’s total dry powder has in fact increased slightly.
The league tables generated using Preqin’s data show that all private equity buyout firms, Blackstone Group has the most dry powder available, with an estimated $20.6bn on hand. Goldman Sachs Merchant Banking Division (excluding capital committed to Fund of Funds and Secondaries) ranks second with an estimated $17.9bn available, and Carlyle Group has the next largest amount of estimated dry powder available, with $12.9bn. These three firms are based in North America, but seek investment opportunities all over the world.