Private equity funds struggle with dry powder

We've been lamenting the iffy state of fund raising for hedge funds and private equity firms as of late (private equity news). For private equity firms anyway, the other side of the shop, the deal-making side, is facing more uncertainty as well. Earlier this year, the industry was downright giddy about the prospects for more exits and more deals. But it's not really happening. The IPO market has been disappointing, which has muted the once high-flying expectations.

Now comes an interesting article from Bloomberg about the sorry state of private equity deal-making. The industry is sitting on half a trillion dollars in funds seeking deals. At the current pace of deals, it will take about 6 years to put all this cash to work. The deal environment has improved somewhat, but we have yet to see a spike in transactions.

We have already seen a few funds effectively give back the money. Bloomberg notes the case of TPG, which has released investors from $2.1 billion of commitments to a $4.6 billion fund raised to invest in financial institutions. 

For more:
- here's the Bloomberg article

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