Dry powder reaches record high of $56bn, says Evercore

The advisory firm also estimates that buyers plan to raise an additional $40bn of capital in the second half of 2015 and in 2016.

Evercore’s Private Capital Advisory estimates that the level of available dry powder in the hands of secondaries buyers has risen to a record high of $56 billion, according to results of its secondary market survey for the first half of the year released this week.

It noted that the top 18 players in the secondaries market managed more than 80 percent of the total dry powder as of the end of June.

Split by asset class, Evercore sees about $42.5 billion in dry powder for private equity, $7.3 billion for real estate and $6.2 billion for infrastructure.

In addition, secondaries buyers also plan to raise about $40 billion of capital during the second half of the year and in 2016, including $35.2 billion for private equity secondaries and $7.28 billion for real estate secondaries.

Including the use of leverage, the total amount of dollars available to invest in secondaries is more than $100 billion.

This is indicating a fundraising environment that continues to be extremely strong, Nigel Dawn, senior managing director and head of Evercore’s Private Capital Advisory Group, told Secondaries Investor.

“In the context of a $40 billion volume for the year, it’s not massively out of kilter,” he said.

Based on a survey involving more than 50 respondents, Evercore estimated that transaction volume for the first half of the year, calculated with transaction purchase price and unfunded capital, amounted to about $20 billion, leading Dawn to conclude that total volume for the year will be roughly in line with last year’s numbers.

“Based on this figure, we’re probably on pace for similar volume to last year,” Dawn added.

Evercore estimates about 14 percent of the $20 billion was in GP-led restructurings.

Respondents to Evercore’s survey included traditional secondaries buyers, some primary investors participating in secondaries transactions on an opportunistic basis and some sovereign wealth funds.