According to an article by the Financial Times, private equity fundraising has hit an all-time high since the boom years in the run-up to the financial crisis – in the past 7 months, more than $240B has been raised across private equity and venture capital funds in North America and Europe – the last time private equity did this well was in 2007 when managers attracted an outstanding $419B.
Interest in private equity funds has intensified this year as investors hunt for returns at a time of low-interest rates. Interestingly, while managers struggle to find suitable businesses to invest in, these buyout funds are sitting on record “dry powder” which puts investment managers in a “very challenging position” – “there is so much dry power and there are more private equity players than there have been for years. That pushes up pricing. That is fine until the merry-go-round stops”. Food for thought.