Private equity firms in North America and Europe have more capital to invest than at any other time in the past decade, according to a report compiled by PitchBook, a company that specializes in data on private equity and venture capital markets.
“Dry powder levels in North American and European PE funds reached new heights of $738.7 billion as of year-end 2016, exceeding the levels seen at the end of the last fundraising cycle in 2007 and 2008,” writes to Dylan E. Cox, an analyst for PitchBook.
Private equity funds are closing faster, hitting their fundraising targets, and decreasing in number while increasing in size, according to the report.
The report attributes the continued success of private equity firms to record-low yields on credit, a tepid performance by competitors such as hedge funds and huge payouts to investors that then choose to reinvest their earnings.
PitchBook expects the size of PE deals to continue growing, barring an extreme economic downturn.
Meanwhile, fundraising by venture capital firms also continues to hum along at a healthy clip. Venture firms and are on pace for 2017 to be their fourth year in a row or raising more than $40 billion, PitchBook said. The industry had gathered $27.5 billion across 165 funds through July.